Finance Valuation on Calculator (TI-84)

TI-84 Plus Tutorial

Part-1
The TI-84 Plus is a fairly easy, but more difficult than most, to use financial calculator
which will serve you well in all finance courses. This tutorial will demonstrate how to use
the financial functions to handle time value of money problems and make financial math
easy. I will keep the examples rather elementary, but understanding the basics is all that
is necessary to learn the calculator.

Initial Setup
There is one adjustment which needs to be made before using this calculator. By default
the TI-84 displays only two decimal places. This is not enough. Personally, I like to see
five decimal places, but you may prefer some other number. To change the display,
press the MODE key, then the down arrow key once (to the Float line). Next, use the
right arrow key to highlight the 5 and press Enter . Finally, press 2nd MODE to exit the
menu. That's it, the calculator is ready to go.

This tutorial will make extensive use of the TVM Solver, but the TI 84 Plus offers
additional financial functions in the Finance menu.

If you have come here because you are experiencing a problem, you might check out
the FAQ. If you don't find the solution, please send me a note.

Example 1 - Future Value of Lump Sums

We'll begin with a very simple problem that will provide you with most of the skills to
perform financial math on the TI-84:

Suppose that you have $100 to invest for a period of 5 years at an interest rate of 10%
per year. How much will you have accumulated at the end of this time period?
In this problem, the $100 is the present value (PV), N is 5, and i is 10%. Before entering
the data you need to put the calculator into the TVM Solver mode. Press the Apps

button, choose the Finance menu (or press the 1 key), and then choose TVM Solver (or
press the 1 key). Your screen should now look like the one in the picture. Enter the data
as shown in the table below.

N 5
I% 10
PV -100
PMT 0
FV 0
P/Y 1
C/Y 1

Now to find the future value simply scroll to the FV line and press Alpha Enter . The
answer you get should be 161.05.

A Couple of Notes
1. Every time value of money problem has either 4 or 5 variables (corresponding to
the 5 basic financial keys). Of these, you will always be given 3 or 4 and asked to
solve for the other. In this case, we have a 4-variable problem and were given 3 of
them (N, I%, and PV) and had to solve for the 4th (FV). To solve these problems
you simply enter the variables that you know on the appropriate lines and then
scroll to the line for the variable you wish to solve for. To get the answer press
Alpha Enter . Be sure that any variables not in the problem are set to 0, otherwise
they will be included in the calculation.

2. The order in which the numbers are entered does not matter.
3. Always make sure that the P/Y (payments per year) and C/Y (compounding
periods per year) are set to 1. At least this is what I prefer. Since these are visible
on the screen at all times, it is not strictly necessary. If you can remember to
 change these to the appropriate values for each problem (1 for annual
compounding, 12 for monthly compounding, etc) then you'll have no problems.
4. When we entered the interest rate, we input 10 rather than 0.10. This is because
the calculator automatically divides any number entered on the I% line by 100. Had
you entered 0.10, the future value would have come out to 100.501 obviously
incorrect.
5. Notice that we entered the 100 in PV as a negative number. This was on
purpose. Most financial calculators (and spreadsheets) follow the Cash Flow Sign
Convention. This is simply a way of keeping the direction of the cash flow straight.
Cash inflows are entered as positive numbers and cash outflows are entered as
negative numbers. In this problem, the $100 was an investment (i.e., a cash
outflow) and the future value of $161.05 would be a cash inflow in five years. Had
you entered the $100 as a positive number no harm would have been done, but the
answer would have been returned as a negative number. This would be correct had
you borrowed $100 today (cash inflow) and agreed to repay $161.05 (cash outflow)
in five years. Do not change the sign of a number using - (the "minus" key).
Instead, use (-) .

6. We can change any of the variables in this problem without needing to re-enter
all of the data. For example, suppose that we wanted to find out the future value if
we left the money invested for 10 years instead of 5. Simply enter 10 on the N line
and solve for FV . You'll find that the answer is 259.37.

Example 1.1 Present Value of Lump Sums

Solving for the present value of a lump sum is nearly identical to solving for the future
value. One important thing to remember is that the present value will always (unless the
interest rate is negative) be less than the future value. Keep that in mind because it can
help you to spot incorrect answers due to a wrong input. Let's try a new problem:

Suppose that you are planning to send your daughter to college in 18 years.
Furthermore, assume that you have determined that you will need $100,000 at that time
in order to pay for tuition, room and board, party supplies, etc. If you believe that you
can earn an average annual rate of return of 8% per year, how much money would you
need to invest today as a lump sum to achieve your goal?

In this case, we already know the future value ($100,000), the number of periods (18
years), and the per period interest rate (8% per year). We want to find the present
value. Go to the TVM Solver and enter the data as follows: 18 into N, 8 into I% , and
100,000 into FV . Note that we enter the $100,000 as a positive number because you
will be withdrawing that amount in 18 years (it will be a cash inflow). Now move to PV

and press ALPHA ENTER and you will see that you need to invest $25,024.90 today in
order to meet your goal. That is a lot of money to invest all at once, but we'll see on the
next page that you can lessen the pain by investing smaller amounts each year.

Example 1.2 Solving for the Number of

Periods
Sometimes you know how much money you have now, and how much you need to
have at an undetermined future time period. If you know the interest rate, then we can
solve for the amount of time that it will take for the present value to grow to the future
value by solving for N.

Suppose that you have $1,250 today and you would like to know how long it will take
you double your money to $2,500. Assume that you can earn 9% per year on your
investment.

This is the classic type of problem that we can quickly approximate using the Rule of 72.
However, we can easily find the exact answer using the TI 84 Plus calculator. Enter 9
into I% , -1250 into PV , and 2500 into FV . Now scroll up to N and press ALPHA ENTER

and you will see that it will take 8.04 years for your money to double.

One important thing to note is that you absolutely must enter your numbers according to
the cash flow sign convention. If you don't make either the PV or FV a negative number
(and the other one positive), then you will get ERR: DOMAIN on the screen instead of
the answer. That is because, if both numbers are positive, the calculator thinks that you
are getting a benefit without making any investment. If you get this error, just press 2
(Go to) to return to the TVM Solver and then fix the problem by changing the sign of
either PV or FV.

Example 1.3 Solving for the Interest Rate

Solving for the interest rate is quite common. Maybe you have recently sold an
investment and would like to know what your compound average annual rate of return
was. Or, perhaps you are thinking of making an investment and you would like to know
what rate of return you need to earn to reach a certain future value. Let's return to our
college savings problem from above, but we'll change it slightly.

Suppose that you are planning to send your daughter to college in 18 years.
Furthermore, assume that you have determined that you will need $100,000 at that time
in order to pay for tuition, room and board, party supplies, etc. If you have $20,000 to
invest today, what compound average annual rate of return do you need to earn in order
to reach your goal?

As before, we need to be careful when entering the PV and FV into the calculator. In
this case, you are going to invest $20,000 today (a cash outflow) and receive $100,000
in 18 years (a cash inflow). Therefore, we will enter -20,000 into PV , and 100,000 into
FV . Type 18 into N, and then solve for I% to find that you need to earn an average of
9.35% per year. If you get ERR: NO SIGN CHNG instead of an answer, it is because
you didn't follow the cash flow sign convention. Press 2 to return to the TVM Solver and
fix the problem.

Note that in our original problem we assumed that you would earn 8% per year, and
found that you would need to invest about $25,000 to achieve your goal. In this case,
though, we assumed that you started with only $20,000. Therefore, in order to reach the
same goal, you would need to earn a higher interest rate.

When you have solved a problem, always be sure to give the answer a second look and
be sure that it seems likely to be correct. This requires that you understand the
calculations that the calculator is doing and the relationships between the variables. If
you don't, you will quickly learn that if you enter wrong numbers you will get wrong
answers. Remember, the calculator only knows what you tell it, it doesn't know what you
really meant.

Please continue on to part II of this tutorial to learn about using the TI 84 Plus to solve
problems involving annuities and perpetuities.

TI-84 Plus Tutorial

Part-2
In the previous section we looked at the basic time value of money keys and how to use
them to calculate present and future value of lump sums. In this section we will take a
look at how to use the TI 84 Plus to calculate the present and future values of regular
annuities and annuities due.

A regular annuity is a series of equal cash flows occurring at equally spaced time
periods. In a regular annuity, the first cash flow occurs at the end of the first period.

An annuity due is similar to a regular annuity, except that the first cash flow occurs
immediately (at period 0).

Example 2 Present Value of Annuities

Suppose that you are offered an investment that will pay you $1,000 per year for 10
years. If you can earn a rate of 9% per year on similar investments, how much should
you be willing to pay for this annuity?

In this case we need to solve for the present value of this annuity since that is the
amount that you would be willing to pay today. Enter the numbers onto the appropriate
lines: 10 into N, 9 into I% , 1000 (cash inflow) into PMT , and 0 for FV . Move to the PV

line and press Alpha Enter to solve the problem. The answer is -6,417.6577. Again, this
is negative because it represents the amount you would have to pay (cash outflow)
today to purchase this annuity.

Example 2.1 Future Value of Annuities

Now, suppose that you will be borrowing $1000 each year for 10 years at a rate of 9%,
and then paying back the loan immediate after receiving the last payment. How much
would you have to repay?

All we need to do is to put a 0 into PV to clear it out, and then solve for FV to find that
the answer is -15,192.92972 (a cash outflow).

Example 2.2 Solving for the Payment

Amount
We often need to solve for annuity payments. For example, you might want to know
how much a mortgage or auto loan payment will be. Or, maybe you want to know how
much you will need to save each year in order to reach a particular goal (saving for
college or retirement perhaps). On the previous page, we looked at an example about
saving for college. Let's look at that problem again, but this time we'll treat it as an
annuity problem instead of a lump sum:

Suppose that you are planning to send your daughter to college in 18 years.
Furthermore, assume that you have determined that you will need $100,000 at that time
in order to pay for tuition, room and board, party supplies, etc. If you believe that you
can earn an average annual rate of return of 8% per year, how much money would you
need to invest at the end of each year to achieve your goal?

Recall that we previously determined that if you were to make a lump sum investment
today, you would have to invest $25,024.90. That is quite a chunk of change. In this
case, saving for college will be easier because we are going to spread the investment
over 18 years, rather than all at once. (Note that, for now, we are assuming that the first
investment will be made one year from now. In other words, it is a regular annuity.)

Let's enter the data: Type 18 into N, 8 into I% , and 100,000 into FV . Now, solve for PMT

and you will find that you need to invest $2,670.21 per year for the next 18 years to
meet your goal of having $100,000.
Example 2.3 Solving for the Number of
Periods
Solving for N answers the question, "How long will it take..." Let's look at an example:

Imagine that you have just retired, and that you have a nest egg of $1,000,000. This is
the amount that you will be drawing down for the rest of your life. If you expect to earn
6% per year on average and withdraw $70,000 per year, how long will it take to burn
through your nest egg (in other words, for how long can you afford to live)? Assume that
your first withdrawal will occur one year from today (End Mode).

Enter the data as follows: 6 into I% , -1,000,000 into PV (negative because you are
investing this amount), and 70,000 into PMT . Now, solve for N and you will see that you
can make 33.40 withdrawals. Assuming that you can live for about a year on the last
withdrawal, then you can afford to live for about another 34.40 years.

Example 2.4 Solving for the Interest Rate

Solving for I% works just like solving for any of the other variables. As has been
mentioned numerous times in this tutorial, be sure to pay attention to the signs of the
numbers that you enter into the TVM keys. Any time you are solving for N, I%, or PMT
there is the potential for a wrong answer or error message if you don't get the signs
right. Let's look at an example of solving for the interest rate:

Suppose that you are offered an investment that will cost $925 and will pay you interest
of $80 per year for the next 20 years. Furthermore, at the end of the 20 years, the
investment will pay $1,000. If you purchase this investment, what is your compound
average annual rate of return?

Note that in this problem we have a present value ($925), a future value ($1,000), and
an annuity payment ($80 per year). As mentioned above, you need to be especially
careful to get the signs right. In this case, both the annuity payment and the future value
will be cash inflows, so they should be entered as positive numbers. The present value
is the cost of the investment, a cash outflow, so it should be entered as a negative
number. If you were to make a mistake and, say, enter the payment as a negative
number, then you will get the wrong answer. On the other hand, if you were to enter all
three with the same sign, then you will get an error message,

Let's enter the numbers: Type 20 into N, -925 into PV , 80 into PMT , and 1000 into FV .

Now, solve for I% and you will find that the investment will return an average of
8.81% per year. This particular problem is an example of solving for the yield to
maturity (YTM) of a bond.

Example 2.5 Annuities Due

In the examples above, we assumed that the first payment would be made at the end of
the year, which is typical. However, what if you plan to make (or receive) the first
payment today? This changes the cash flow from from a regular annuity into an annuity
due.

Normally, the calculator is working in End Mode. It assumes that cash flows occur at the
end of the period. In this case, though, the payments occur at the beginning of the
period. Therefore, we need to put the calculator into Begin Mode. To change to Begin
Mode, scroll down to the bottom of the TVM Solver. You should see that END is
currently highlighted. Now, press the right arrow key to highlight BEGIN, and then press
ENTER . Note that nothing will change about how you enter the numbers. The calculator
will simply shift the cash flows for you. Obviously, you will get a different answer.

Let's do the college savings problem again, but this time assuming that you start
investing immediately:

Suppose that you are planning to send your daughter to college in 18 years.
Furthermore, assume that you have determined that you will need $100,000 at that time
in order to pay for tuition, room and board, party supplies, etc. If you believe that you
can earn an average annual rate of return of 8% per year, how much money would you
need to invest at the beginning of each year (starting today) to achieve your goal?

As before, enter the data: 18 into N, 8 into I% , and 100,000 into FV . The only thing that
has changed is that we are now treating this as an annuity due. So, once you have
changed to Begin Mode, just solve for PMT . You will find that, if you make the first
investment today, you only need to invest $2,472.42. That is about $200 per year less
than if you make the first payment a year from now because of the extra time for your
investments to compound.

Be sure to switch back to End Mode after solving the problem. Since you almost always
want to be in End Mode, it is a good idea to get in the habit of switching back so that
you don't forget. Scroll down to the bottom of the TVM Solver, highlight END and press
Enter .

Example 2.6 Perpetuities

Occasionally, we have to deal with annuities that pay forever (at least theoretically)
instead of for a finite period of time. This type of cash flow is known as a perpetuity
(perpetual annuity, sometimes called an infinite annuity). The problem is that the TI 84
Plus has no way to specify an infinite number of periods for N.

Calculating the present value of a perpetuity using a formula is easy enough: Just divide
the payment per period by the interest rate per period. In our example, the payment is
$1,000 per year and the interest rate is 9% annually. Therefore, if that was a perpetuity,
the present value would be:

$11,111.11 = 1,000 0.09

If you can't remember that formula, you can "trick" the calculator into getting the correct
answer. The trick involves the fact that the present value of a cash flow far enough into
the future (way into the future) is going to be approximately $0. Therefore, beyond some
future point in time the cash flows no longer add anything to the present value. So, if we
specify a suitably large number of payments, we can get a very close approximation (in
the limit it will be exact) to a perpetuity.

Let's try this with our perpetuity. Enter 500 into N (that will always be a large enough
number of periods), 9 into I% , and 1000 into PMT . Now scroll to PV and press Alpha

Enter and you will get $11,111.11 as your answer.

Please note that there is no such thing as the future value of a perpetuity because the
cash flows never end (period infinity never arrives).
Please continue on to part III of this tutorial to learn about uneven cash flow streams,
net present value, internal rate of return, and modified internal rate of return.

TI-84 Plus Tutorial

Part-3
In the previous section we looked at the basic time value of money keys and how to use
them to calculate present and future value of lump sums and regular annuities. In this
section we will take a look at how to use the TI 84 Plus to calculate the present and
future values of uneven cash flow streams. We will also see how to calculate net
present value (NPV), internal rate of return (IRR), and the modified internal rate of
return (MIRR).

Example 3 Present Value of Uneven Cash

Flows
This is where the TI-84 Plus is considerably more difficult than most other financial
calculators. Its not too bad one you get used to it, but it is more difficult than necessary.
Still, you use what you've got, so lets plunge in. First, exit from the TVM Solver menu by
pressing 2nd MODE and then press APPS and return to the finance menu.

To find the present value of an uneven stream of cash flows, we need to use the NPV
function. This function is defined as:

NPV( Rate, Initial Outlay, {Cash Flows}, {Cash Flow Counts})

Note that the {Cash Flow Counts} part is optional and we will ignore it here. I will
discuss it in the FAQ.

Suppose that you are offered an investment which will pay the following cash flows at
the end of each of the next five years:

Period Cash Flow

0 0
 1 100

2 200

3 300

4 400

5 500

How much would you be willing to pay for this investment if your required rate of return
is 12% per year?

We could solve this problem by finding the present value of each of these cash flows
individually and then summing the results. However, that is the hard way. Instead, we'll
use the NPV function. To begin, scroll down in the finance menu until you get to the line
that reads NPV( . Press Enter to select that function, and you will see the beginning of
the NPV function on your screen. Now, complete the function as follows:

NPV(12,0,{100,200,300,400,500})

Press Enter to solve the function and we find that the present value is $1,000.17922.
Note that you can easily change the interest rate by pressing the 2nd Enter to retrieve
the function, and then using the arrow keys to edit it. For example, to change the rate to
10%, press 2nd Enter and then use the arrow keys to move to the interest rate and
press DEL to delete the 12, and then press 2nd DEL (that's the INS function) and enter
10. Press Enter and you will find that the answer is now $1,065.25883. Reset the
interest rate to 12 before continuing.

Example 3.1 Future Value of Uneven Cash

Flows
Now suppose that we wanted to find the future value of these cash flows instead of the
present value. There is no function to do this so we need to use a little ingenuity.
Realize that one way to find the future value of any set of cash flows is to first find the
present value. Next, find the future value of that present value and you have your
solution. In this case, we've already determined that the present value is $1,000.17922,
so we'll recall the NPV function by pressing 2nd Enter (you may have to do this twice to
get back to the original 12% interest rate). Now, add * 1.12 ^ 5 to the end of the
function, so that it now looks like:

NPV(12,0,{100,200,300,400,500})*1.12^5

Press Enter , and you will see that the future value of these cash flows is
$1,762.65754. Pretty easy, huh? Ok, at least its easier than adding up the future
values of each of the individual cash flows. It does require you to know the equation for
the future value of a lump sum, but you ought to know that anyway.

Example 4 Net Present Value (NPV)

Calculating the net present value (NPV) and/or internal rate of return (IRR) is virtually
identical to finding the present value of an uneven cash flow stream as we did in
Example 3.

Suppose that you were offered the investment in Example 3 at a cost of $800. What is
the NPV? IRR?

To solve this problem we must not only tell the calculator about the annual cash flows,
but also the cost (previously, we set the cost to 0 because we just wanted the present
value of the cash flows). Generally speaking, you'll pay for an investment before you
can receive its benefits so the cost (initial outlay) is said to occur at time period 0 (i.e.,
today). To find the NPV recall the NPV function and edit it so that the initial outlay
(previously 0) is -800 (use 2ND DEL to insert numbers without overwriting). The function
will look like this on screen:

NPV(12,-800,{100,200,300,400,500})

Press Enter to get the solution and you'll see that the NPV is $200.17922.

***The NPV rule states that all projects which have a positive net present value
should be accepted while those that are negative should be rejected.

Example 4.1 Internal Rate of Return (IRR)

Solving for the IRR is done in a similar way, except that we'll use the IRR function. This
function is defined as:

IRR(Initial Outlay, {Cash Flows}, {Cash Flow Counts})

For this problem, the function is:

IRR(-800, {100,200,300,400,500})

Again, note that the {Cash Flow Counts} part is optional and we will ignore it here, but it
is in the FAQ. To get the IRR function on the screen, press APPS and return to the
finance menu, and scroll down until you see IRR( . Enter the function as shown above
and then press Enter to get the answer (19.5382%).

***The IRR rule is as follows: IRR > cost of capital = accept project; IRR < cost of
capital = reject project.

Example 4.2 Modified Internal Rate of

Return (MIRR)
The IRR has been a popular metric for evaluating investments for many years
primarily due to the simplicity with which it can be interpreted. However, the IRR suffers
from a couple of serious flaws. The most important flaw is that it implicitly assumes that
the cash flows will be reinvested for the life of the project at a rate that equals the IRR. A
good project may have an IRR that is considerably greater than any reasonable
reinvestment assumption. Therefore, the IRR can be misleadingly high at times.

The modified internal rate of return (MIRR) solves this problem by using an explicit
reinvestment rate. Unfortunately, financial calculators don't have an MIRR key like they
have an IRR key. That means that we have to use a little ingenuity to calculate the
MIRR. Fortunately, it isn't difficult. Here are the steps in the algorithm that we will use:

1. Calculate the total present value of each of the cash flows, starting from period 1
(set the initial outlay to 0). Use the calculator's NPV function just like we did in
Example 3, above. Use the reinvestment rate as your discount rate to find the
present value.
 2. Calculate the future value as of the end of the project life of the present value
from step 1. The interest rate that you will use to find the future value is the
reinvestment rate.
3. Finally, find the discount rate that equates the initial cost of the investment with
the future value of the cash flows. This discount rate is the MIRR, and it can be
interpreted as the compound average annual rate of return that you will earn on an
investment if you reinvest the cash flows at the reinvestment rate.

Suppose that you were offered the investment in Example 3 at a cost of $800. What is
the MIRR if the reinvestment rate is 10% per year?

Let's go through our algorithm step-by-step:

1. The present value of the cash flows can be found as in Example 3.

NPV(10,0,{100,200,300,400,500})

We find that the present value is $1,065.26.

2. To find the future value of the cash flows, go to the TVM Solver and enter 5 into
N, 10 into I% , and -1065.26 into PV . Now solve for the FV and see that it is
$1,715.61.

3. At this point our problem has been transformed into an $800 investment with a
lump sum cash flow of $1,715.61 at period 5. The MIRR is the discount rate (I%)
that equates these two numbers. Enter -800 into PV and then solve for I% . The
MIRR is 16.48% per year.

Note that we can actually combine steps 1 and 2. Just as we did in Example 3, we can
calculate the future value (using our 10% reinvestment rate) as follows:

NPV(10,0,{100,200,300,400,500})*1.10^5

The future value is the same $1,715.61 that we found above. Now, go to the TVM
Solver and enter 5 into N, -800 into PV , and 1715.61 into FV . Solve for I% and see that
the MIRR is 16.48% just as before.
So, we have determined that our project is acceptable at a cost of $800. It has a
positive NPV, the IRR is greater than our 12% required return, and the MIRR is also
greater than our 12% required return.

***While the internal rate of return (IRR) assumes the cash flows from a project
are reinvested at the IRR, the Modified-IRR assumes that positive cash flows are
reinvested at the firm's cost of capital, and the initial outlays are financed at the
firm's financing cost. Therefore, MIRR more accurately reflects the cost and
profitability of a project.

Solving Problems with Non-Annual Periods

on the TI 84 Plus
Many, perhaps most, time value of money problems in the real world involve other than
annual time periods. For example, most consumer loans (e.g., mortgages, car loans,
credit cards, etc) require monthly payments. All of the examples in the previous pages
have used annual time periods for simplicity. On this page, I'll show you how easy it is to
deal with non-annual problems.

General Considerations
The first thing to understand is that all of the principles that you have learned to apply
for annual problems still apply for non-annual problems. In truth, nothing has changed at
all. If you try to think in terms of "periods" rather than years, you will be ahead of the
game. A period can be any amount of time. Most common would be daily, monthly,
quarterly, semiannually, or annually. However, a time period could be any imaginable
amount of time (e.g., seven weeks, hourly, three days).

The first, and most important, thing to think about when dealing with non-annual periods
is the number of periods in a year. The reason that this is so important is because you
must be consistent when entering data into the 84 Plus. The numbers entered into the
N , I% and PMT keys must agree as to the length of the time periods being used. So, if
you are working on a monthly problem, then N should be the total number of months, I

% should be the monthly interest rate, and PMT should be the monthly annuity payment.
An Example
Very often in a problem, you are given annual numbers but then told that "payments are
made on a monthly basis," or that "interest is compounded daily." In these cases, you
must adjust the numbers given in the problem. Let's look at an example:

You are considering the purchase of a new home for $250,000. Your banker has
informed you that they are willing to offer you a 30-year, fixed rate loan at 7% with
monthly payments. If you borrow the entire $250,000, what is the required monthly
payment?

Notice that we are told that the loan term is 30 years and the interest rate is 7% per year
(that is implied, not explicitly stated). So, you might be forgiven for expecting that a
period is one year. However, on further reading you see that the payments must be
made every month. Therefore, the length of a period is one month, and you must
convert the variables to a monthly basis in order to get the correct answer.

Since there are 12 months in a year, we calculate the total number of periods by
multiplying 30 years by 12 months per year. So, N is 360 months, not 30 years.
Similarly, the interest rate is found by dividing the 7% annual rate by 12 to get 0.5833%
per month. Note that we do not make any adjustments to the PV ($250,000) because it
occurs at a single point in time, not repeatedly. The same logic would apply if there was
an FV in this problem. When you solve for the payment, the calculator will automatically
give you the monthly (per period to be exact) payment amount.

In this problem, then, we would solve for the payment amount by entering 360 in N,

0.5833 into I% , and 250,000 into PV . When you solve for PMT you will find that the
monthly payment is $1,663.26.

One thing to be careful about is rounding. For example, when calculating the monthly
interest rate, you should do the calculation in the I% line in the TVM Solver. Do not do
the calculation and then write down the answer for later entry. If you do, you will be
truncating the interest rate to the number of decimal places that are shown on the
screen, and your answer will suffer from the rounding. The difference may not be more
than a few pennies, but every penny matters. Try sending your lender a payment that is
consistently three cents less than required and see what happens. It probably won't be
long before you get a nasty letter.

Adjust First, Not After, Solving the Problem

You might be tempted to think that you could treat the problem as an annual one, and
then adjust your answer to be monthly. Don't do that! The math simply doesn't work that
way. To prove it, let's input annual numbers, and then convert the annual payment to
monthly by dividing by 12. Enter 30 into N, 7 into I% , and 250,000 into PV . When you
solve for PMT you will find that the annual payment would be $20,146.60. However, you
have to make monthly payments so if we divide that by 12 we get a monthly payment of
$1,678.88.

Do you see the problem? If you do the problem this way, you get an answer that is
$15.63 too high every month. So, when you make the adjustments matters. Always
adjust your variables before solving the problem. The reason for the difference is the
compounding of interest. If you have read through my tutorial on the Mathematics of
Time Value of Money, then you know that the more frequently interest is compounded,
the smaller the payment has to be in order to grow to a particular future value.

Using the TI 84 Plus Payments per Year

Setting
You may have noticed that the TI 84 Plus can semi-automatically adjust for payment
frequency for you by using the P/Y setting at the bottom of the TVM Solver. It can also
adjust for situations where the compounding frequency is different from the payment
frequency by using C/Y. I strongly recommend that you avoid this feature because I
think it causes more problems than it solves. The reason is that if you forget to change it
when doing the next problem, you will probably get a wrong answer. It can be difficult to
spot problems caused by this setting.

Regardless of my feelings about this setting, I'm going to tell you how to use it. P/Y
stands for "payments per year." If you set this value to, say, 12 then the calculator will
assume monthly compounding and adjust the interest rate appropriately. However, and
this is very important, it will not adjust the number of periods or the payment amount!
That makes this feature virtually worthless. C/Y means "compounding periods per year"
and is normally the same as P/Y. In fact, if you change P/Y then C/Y will change to the
same value. You should only change C/Y if the compounding frequency differs from the
payment frequency. For example, if you have quarterly payments but the interest rate is
compounded monthly, then you would set P/Y to 4 and C/Y to 12.

Let's do the problem again, but using this "feature." First, set P/Y to 12 (monthly). Now,
we can enter the data. 360 into N (again, you still have to enter the total number of
periods), 7 into I% , and 250,000 into PV . Now, solve for the payment by pressing Alpha

ENTER and you will find that the monthly payment is $1,663.26.

The answer is correct, but what did you save by using that "shortcut?" Nothing at all. In
fact, it takes an extra keystroke or two to use this feature. Furthermore, if you forget to
change the setting when you do the next problem, you will get the wrong answer unless
that problem also happens to use monthly compounding.

My recommendation is to follow the simple steps that I outlined above: Set P/Y to 1 and
then forget about it forever. Always make N the total number of periods, I% the interest
rate per period, and PMT the payment per period.

I hope that you have found this tutorial to be helpful. If this tutorial is not enough, Texas
Instruments offers a free "Guidebook" in English or Spanish for this calculator. Other
languages are also available.

Bond Valuation on the TI 83, TI 83 Plus,

and TI 84 Plus Calculators
A bond is a debt instrument, usually tradeable, that represents a debt owed by the
issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate
of interest for a number of years, and then to repay the principal on the maturity date. In
the U.S. bonds typically pay interest every six months (semi-annually), though other
payment frequencies are possible.
The purpose of this section is to show how to calculate the value of a bond, both on a
coupon payment date and between payment dates. If you aren't familiar with the
terminology of bonds, please check the Bond Terminology page. If you aren't
comfortable doing time value of money problems on the TI 83 Plus or TI 84 Plus, you
should work through those tutorials first.

You may also be interested in my tutorial on calculating bond yields using the TI 83 or TI
84 Plus.

Bond Cash Flows

As noted above, a bond typically makes a series of semiannual interest payments and
then, at maturity, pays back the face value. Let's look at an example:

Draw a time line for a 3-year bond with a coupon rate of 8% per year paid semiannually.
The bond has a face value of $1,000.

The bond has three years until maturity and it pays interest semiannually, so the time
line needs to show six periods. The bond will pay 8% of the $1,000 face value in interest
every year. However, the annual interest is paid in two equal payments each year, so
there will be six coupon payments of $40 each. Finally, the $1,000 will be returned at
maturity (i.e., the end of period 6). Therefore, the time line looks like the one below:

We will use this bond throughout the tutorial.

Bond Valuation on a Coupon Date

We will begin our example by assuming that today is either the issue date or a coupon
payment date. In either case, the next payment will occur in exactly six months. This will
be important because we are going to use the TVM Solver to find the present value of
the cash flows.
The value of any asset is the present value of its cash flows. Therefore, we need to
know two things:

1. The size and timing of the cash flows.

2. The required rate of return (discount rate) that is appropriate given the riskiness
of the cash flows.

We have already identified the cash flows above. Take a look at the time line and see if
you can identify the two types of cash flows. Notice that the interest payments are a
$40, six-period regular annuity. The face value is a $1,000 lump sum cash flow. Using
the principle of value additivity, we know that we can find the total present value by first
calculating the present value of the interest payments and then the present value of the
face value. Adding those together gives us the total present value of the bond.

We don't have to value the bond in two steps, however. The TVM Solver can handle this
calculation as we will see in the next example:

Assuming that your required return for the bond is 9.5% per year, what is the most that
you would be willing to pay for this bond?

We can calculate the present value of the cash flows using the TVM Solver. Go to the
Finance menu and choose TVM Solver. Now enter the data: 6 into N, 4.75 into I%

(9.5/2 = 4.75), 40 into PMT , and 1,000 into FV . Now, scroll up to PV and press Alpha

ENTER to get the present value. The value of the bond is $961.63.

Notice that the bond is currently selling at a discount (i.e., less than its face value). This
discount must eventually disappear as the bond approaches its maturity date. A bond
selling at a premium to its face value will slowly decline as maturity approaches. In the
chart below, the blue line shows the price of our example bond as time passes.
The red line shows how a bond that is trading at a premium will change in price over
time. Both lines assume that market interest rates stay constant. In either case, at
maturity a bond will be worth exactly its face value. Keep this in mind as it will be a key
fact in the next section.

Bond Valuation In-between Coupon Dates

In the previous section we saw that it is very easy to find the value of a bond on a
coupon payment date. However, calculating the value of a bond in-between coupon
payment dates is more complex. As we'll see, the reason is that interest does not
compound between payment dates. That means that you cannot get the correct answer
by entering fractional periods (e.g., 5.5) into N.

Let's start by using the same bond, but we will now assume that 6 months have passed.
That is, today is now the end of period 1. What is the value of the bond at this point?

To figure this out, note that there are now 5 periods remaining until maturity, but nothing
else has changed. Therefore, simply scroll up to N and change the value to 5. Now
calculate the PV, and you will find that the value of the bond at the end of period 1 will
be $967.30. Notice that the value of the bond has increased a little bit since period 0. As
noted previously, this is because the discount must eventually vanish as the maturity
date approaches. The bond must be worth exactly $1,000 at maturity because that is
how much it will pay at that time.

Now, is there another way that we might arrive at that period 1 value? Of course.
Remember that your required return is 4.75% per period. Therefore, the value of the
bond must increase by that amount each period. If we calculate the future value of
$961.63 (the value at period 0) for 1 period at 4.75% we should get the same answer:

961.63(1.0475) = 1,007.30

Wait a minute! That's not the same answer. However, remember that this is the total
value of your holdings at the end of period 1. The value that we calculated previously
($967.30) did not include the $40 coupon payment that you received. If we subtract that,
you can see that we do get the same result:

1,007.30 - 40 = 967.30

This is one of the key points that you must understand to value a bond between coupon
payment dates.

Let me recap what we just did: We wanted to know the value of the bond at the end of
period 1. So, we calculated the value as of the previous coupon payment date, and then
calculated the future value of that price. Then, we subtracted the amount of accrued
interest to get to the quoted price of the bond.

We can use exactly this same procedure to find the value of the bond in-between
payment dates.

Using the same bond as above, what will the value be after 3 months have passed in
the current period? Assume that interest rates have not changed.

So, we are now looking for the value of the bond as of period 0.5 (i.e., exactly halfway
through the first payment period). Unfortunately, the TVM Solver can only help us with
this for the first step. Recall that we first need to calculate the PV of the cash flows as of
the previous payment date (period 0). Open the TVM Solver and enter: 6 into N, 4.75
into I% , 40 into PMT , and 1,000 into FV . Now, scroll to PV and then press ALPHA

ENTER . As before, we find that the value of the bond at time period 0 was $961.63.
Now we need to find the future value of $961.63 one-half of a period in the future:

961.63(1.0475)0.5 = 984.20

Remember that this gives us the "dirty" price of the bond (it includes the accrued
interest). To do the above calculation in the calculator, exit the TVM Solver. We are
going to grab the PV that we calculated (the 961.63) by using the tvm_PV function from
the Finance Menu. First, press the () key because we need to change the PV to a
positive number. Now, go to the Finance menu and select the tvm_PV function. On the
screen, you should now see:

-tvm_PV

Now, type * 1.0475 ^ 0.5 and your screen will look like this:

-tvm_PV*1.0475^0.5

Press ENTER and you will find that this answer is $984.20 as we found above.

The process so far is shown in the graphic below:

Now, to get the clean price (doesn't include accrued interest, this is the price that would
be quoted by a dealer) at period 0.5 we need to subtract the accrued interest.
Because interest accrues equally on each day of the payment period, we can calculate
the accrued interest by multiplying the total interest for the period by the fraction of the
period that has elapsed:

Accrued Interest = Total Interest x Fraction of Period Elapsed

In this example, that works out to $20:

Accrued Interest = 40 x 0.5 = 20

Finally, to find the clean (quoted) price, we subtract the accrued interest from the dirty
price:

Clean Price = Dirty Price - Accrued Interest

In this example, we get $964.20:

Clean Price = 984.20 - 20 = 964.20

The same procedure could be done for any fractional period. For example, if 2 months
(out of 6) have elapsed, then the fraction is 1/3. So, the clean price of the bond would
be $963.28. Prove that for yourself to make sure that you understand the process.

Please note that you cannot get the correct answer by entering a fractional number into
N. In this case, if you simply entered 5.5 into N (because there are 5.5 periods
remaining until maturity) you would get an answer of $964.43. That is close, but it is not
correct and it is not "close enough." The reason that it won't work is because the
formula used by the calculator assumes that the interest payments are an annuity. That
is, the time between the cash flows must be exactly the same in every case. Clearly,
that isn't true when valuing a bond between coupon payment dates.

Bond Price Quotes and Accrued Interest

It is important to understand that bond prices are quoted by dealers without the accrued
interest. So, if you get a quote of $950 to purchase a bond, then you will pay $950 plus
however much interest has accrued to the seller of the bond since the last coupon
payment. That is, the invoiced price is the quoted price plus accrued interest. There are
three terms that you should understand:
Accrued Interest
Accrued interest is the interest that has been earned, but not yet been paid by
the bond issuer, since the last coupon payment. Note that interest accrues
equally on every day during the period. That is, it does not compound. So,
halfway through the period, you will have accrued exactly one-half of the period's
interest payment. It works the same way for any other fraction of a payment
period.

Clean Price
The "clean price" is the price of the bond excluding the accrued interest. This is
also known as the quoted price.

Dirty Price
The "dirty price" is the total price of the bond, including accrued interest. This is
the amount that you would actually pay (or receive) if you purchase (or sell) the
bond.

The dirty price is simply the clean price plus the accrued interest.

One final point: In the "real world" bond prices are quoted as a percentage of
their face value, not in dollars. So, if a bond dealer quoted the price of our
example bond, they would say 96.443, not 964.43. This practice allows a bond
price to be quoted without also having to state its face value, and it makes price
quotes comparable across different bonds regardless of their face value.

I hope that you have found this tutorial to be useful. Please continue on to the
next page to learn about calculating the various bond return measures (current
yield, yield to maturity, and yield to call).

Bond Yield Calculation on the TI 83, TI 83

Plus, and TI 84 Plus Calculators
One of the key variables in choosing any investment is the expected rate of return. We
try to find assets that have the best combination of risk and return. In this section we will
see how to calculate the rate of return on a bond investment. If you are comfortable
using the TVM Solver, then this will be a simple task. If not, then you should first work
through my TI 83/TI 83 Plus or TI 84 Plus tutorial.

The expected rate of return on a bond can be described using any (or all) of three
measures:

Current Yield

Yield to Maturity
Yield to Call

We will discuss each of these in turn below. In the bond valuation tutorial, we used an
example bond that we will use again here. The bond has a face value of $1,000, a
coupon rate of 8% per year paid semiannually, and three years to maturity. We found
that the current value of the bond is $961.63. For the sake of simplicity, we will assume
that the current market price of the bond is the same as the value. (You should be
aware that intrinsic value and market price are two different, though related, concepts.)

The Current Yield

The current yield is a measure of the income provided by the bond as a percentage of
the current price:

There is no built-in function to calculate the current yield, so you must use this formula.
For the example bond, the current yield is 8.32%:

Note that the current yield only takes into account the expected interest payments. It
completely ignores expected price changes (capital gains or losses). Therefore, it is a
useful return measure primarily for those who are most concerned with earning income
from their portfolio. It is not a good measure of return for those looking for capital gains.
Furthermore, the current yield is a useless statistic for zero-coupon bonds.

The Yield to Maturity

Unlike the current yield, the yield to maturity (YTM) measures both current income and
expected capital gains or losses. The YTM is the internal rate of return of the bond, so it
measures the expected compound average annual rate of return if the bond is
purchased at the current market price and is held to maturity.

In the case of our example bond, the current yield understates the total expected return
for the bond. As we saw in the bond valuation tutorial, bonds selling at a discount to
their face value must increase in price as the maturity date approaches. The YTM takes
into account both the interest income and this capital gain over the life of the bond.

There is no formula that can be used to calculate the exact yield to maturity for a bond
(except for trivial cases). Instead, the calculation must be done on a trial-and-error
basis. This can be tedious to do by hand. Fortunately, the TI 83 Plus and TI 84 Plus
have the TVM Solver, which can do the calculation quite easily. Technically, you could
also use the IRR function, but there is no need to do that when the TVM Solver is easier
and will give the same answer.

To calculate the YTM, go to the Finance menu and bring up the TVM Solver. We can
find the YTM by solving for I% . Enter 6 into N, -961.63 into PV , 40 into PMT , and 1,000
into FV . Now, scroll up to I% and then press ALPHA ENTER . You should find that the
YTM is 4.75%.

But wait a minute! That just doesn't make any sense. We know that the bond carries a
coupon rate of 8% per year, and the bond is selling for less than its face value.
Therefore, we know that the YTM must be greater than 8% per year. You need to
remember that the bond pays interest semiannually, and we entered N as the number
of semiannual periods (6) and PMT as the semiannual payment amount (40). So, when
you solve for I% the answer is a semiannual yield. Since the YTM is always stated as
an annual rate, we need to double this answer. In this case, then, the YTM is 9.50%
per year.

So, always remember to adjust the answer you get for I% back to an annual YTM by
multiplying by the number of payment periods per year.

The Yield to Call

Many bonds (but certainly not all), whether Treasury bonds, corporate bonds, or
municipal bonds are callable. That is, the issuer has the right to force the redemption of
the bonds before they mature. This is similar to the way that a homeowner might
choose to refinance (call) a mortgage when interest rates decline.

Given a choice of callable or otherwise equivalent non-callable bonds, investors would

choose the non-callable bonds because they offer more certainty and potentially higher
returns if interest rates decline. Therefore, bond issuers usually offer a sweetener, in the
form of a call premium, to make callable bonds more attractive to investors. A call
premium is an extra amount in excess of the face value that must be paid in the event
that the bond is called.

The picture below is a screen shot (from the FINRA TRACE Web site on 8/17/2007) of
the detailed information on a bond issued by Union Electric Company. Notice that the
call schedule shows that the bond is callable once per year, and that the call premium
declines as each call date passes without a call. If the bond is called after 12/15/2015
then it will be called at its face value (no call premium).
It should be obvious that if the bond is called then the investor's rate of return will be
different than the promised YTM. That is why we calculate the yield to call (YTC) for
callable bonds.

The yield to call is identical, in concept, to the yield to maturity, except that we assume
that the bond will be called at the next call date, and we add the call premium to the
face value. Let's return to our example:

Assume that the bond may be called in one year with a call premium of 3% of the face
value. What is the YTC for the bond?

Return to the TVM Solver. In this case, the bond has 2 periods before the next call date,
so enter 2 into N. The current price is the same as before, so enter -961.63 into PV . The
payment hasn't changed, so enter 40 into PMT . We need to add the call premium to the
face value, so enter 1,030 into FV . Solve for I% and you will find that the YTC is 7.58%
per semiannual period. Remember that we must double this result, so the yield to call
on this bond is 15.17% per year.

Now, ask yourself which is more advantageous to the issuer: 1) Continuing to pay
interest at a yield of 9.50% per year; or 2) Call the bond and pay an annual rate of
15.17%. Obviously, it doesn't make sense to expect that the bond will be called as of
now since it is cheaper for the company to pay the current interest rate.

I hope that you have found this tutorial to be helpful.

 Loan Amortization on TI 83, TI 83 Plus and
TI 84 Plus
In this tutorial we will see how to create an amortization schedule for a fixed-rate loan
using the TI 83, 83 Plus, or TI 84 Plus graphing calculators from Texas Instruments.
One of the advantages of these calculators over other financial calculators is their ability
to create tables of data. We will use this functionality to generate a complete
amortization table. If you prefer to use a spreadsheet, which I do, please see my
spreadsheet amortization tutorial.

Fully amortizing loans are quite common. Examples include home mortgages, car
loans, etc. Typically, but not always, a fully amortizing loan is one that calls for equal
payments (annuity) throughout the life of the loan. The loan balance is fully retired after
the last payment is made. Each payment in this type of loan consists of interest and
principal payments. It is the presence of the principal payment that slowly reduces the
loan balance, eventually to $0.

An amortization schedule is a table that shows each loan payment and a breakdown of
the amount of interest and principal paid. Typically, it will also show the remaining
balance after each payment has been made.

Calculating Interest and Principal in a Single

Payment
Let's start by reviewing the basics with an example loan (if you already know the basics,
you can skip right to Creating an Amortization Schedule):

Imagine that you are about to take out a 30-year fixed-rate mortgage. The terms of the
loan specify an initial principal balance (the amount borrowed) of $200,000 and an APR
of 6.75%. Payments will be made monthly. What will be the monthly payment? How
much of the first payment will be interest, and how much will be principal?
Our first priority is to calculate the monthly payment amount. We can do this most easily
by using the TVM Solver. So, enter the TVM Solver by pressing the APPS button and
then choose the first item in the Finance Menu.

Note that since we are making monthly payments, we will need to adjust the number of
periods (N) and the interest rate (I%) to monthly values. This can be done within the
TVM Solver itself. Enter the data exactly as shown below:

N 30*12
I% 6.75/12
PV 200000
PMT 0
FV 0
P/Y 1
C/Y 1

Note that when you use the arrow keys to move away from any of the items, the
calculator will automatically perform any calculations in that row. So, when you type
30*12 for N and then press the down arrow key, the value for N will automatically be
converted to 360. The same trick works for I%, which in this case will be converted to
0.5625%. This is a handy shortcut.

Now, to calculate the monthly payment, scroll down to the PMT row and then press
ALPHAENTER . You should find that the monthly payment is $1,297.196. (Note that your
actual mortgage payment would be higher because it would likely include insurance and
property tax payments that would be funneled into an escrow account by the mortgage
service company.)

That answers our first question. So, we now need to separate that payment into its
interest and principal components. We can do this using a couple of simple formulas
(we will use some built-in functions in a moment):

Monthly Interest Payment = Principal Balance x Monthly Interest Rate

Monthly Principal Payment = Monthly Payment - Monthly Interest Payment

Using these formulas, we can see that the interest component of the first payment
would be:

Interest in 1st Payment = 200,000 x 0.005625 = $1,125

and the principal payment is:

Principal in 1st Payment = 1,297.196 - 1,125 = $172.196

Note that the sum of the interest and principal is the amount of the total payment:

1,125 + 172.196 = $1,297.196

That is the case for every single payment over the life of the loan. However, as
payments are made the principal balance will decline. This, in turn, means that the
interest payment will be lower, and the principal payment will be higher (because the
total payment amount is constant), for each successive payment.

Using the Built-in Functions

We've now seen how the principal and interest components of each payment are
calculated. However, you can use a couple of built-in functions to do the math for you.
These functions also make it easier to calculate the principal and/or interest for any
arbitrary payment. Before we can use these functions, you must enter the loan details
into the TVM Solver as we did above.

The two functions from the Finance menu that we are going to use are the Int (sum
interest) and the Prn (sum principal) functions. These functions calculate the total
amount of interest or principal paid between any two payments. They are defined as:

Int(Begin Period, End Period)

Prn(Begin Period, End Period)

For example, we can calculate the total interest paid in the first year of the loan by
using:

Int(1,12) = $13,434.858
We could do the same thing using Prn(1,12) and find that the total principal paid in the
first year is $2,131.496. Again, it is important to note that these functions take the loan
data directly from the TVM Solver.

Now, we can also use these functions to calculate the interest and principal for any
payment by specifying that the beginning and ending periods are the same. So, we can
calculate the amount of interest in the first payment as:

Int(1,1) = $1,125

and the amount of the principal in the first payment as:

Prn(1,1) = $172.196

Those answers match exactly the ones that we calculated manually above. It should
now be clear that if we want to calculate the amount of interest in the second payment,
we would use Int(2,2). You can do the same for any interest or principal payment that
you wish to find.

One last function that we will need is the Bal function. It calculates the remaining
balance at the end of any time period and is defined as:

bal(period number)

If we want to know the remaining principal balance after the first payment, we can
calculate it with:

bal(1) = $199,827.804

You can verify that by subtracting the amount of principal paid in the first payment from
the beginning balance:

Principal Balance After 1st Payment = 200,000 - 172.196 = $199,827.804

Creating an Amortization Schedule

As noted in the beginning, an amortization schedule is simply a listing of each payment
and the breakdown of interest, principal, and remaining balance. For this loan, an
amortization table for the first six months would look like this:
If you haven't been following along, you will first need to enter the loan data (as shown
above) into the TVM Solver before you can create an amortization schedule.

The first thing that we want to do is to set up the table. As shown in the picture above,
we are going to want four columns (Payment, Interest, Principal, and Balance). So, we
need to define four Y variables (note that our X variable is the period number, and we'll
set that up next). Press the Y= button (the furthest left key under the screen) to get into
the variable definition screen. There are 10 variables that you can define (Y 1, Y2,...Y0).
We will use the first four to define our variables. Note that you will use the Finance
Menu to get the functions, and the X,T,,n key to type the X. Enter the data as shown
below (you may want to review the function definitions if necessary):

\Y1= tvm_Pmt
\Y2= Int(X,X)
\Y3= Prn(X,X)
\Y4= bal(X)

Now press 2ndWINDOW (that gets you TBLSET for Table Setup). Set TblStart to 1 and
Tbl to 1. Those settings will start the table with X = 1 (first period) and then increase it
by 1 for each row in the table.

That said to create the amortization schedule with the variables that we have defined,
press 2ndGRAPH (Table). That will take you to the table screen where you can scroll
through the table using the arrow keys. Note that as you scroll around, the highlighted
variable and its exact value will be shown below the table. For example, if you scroll
over to the fourth column (Y4) and the sixth row, you will see that the remaining balance
after six payments is $198,952.184. That matches our amortization schedule that is
pictured above.

Note that at any time you can change the loan terms for the amortization table. Simply
go back to the TVM Solver, change the loan terms, and recalculate the payment
amount. Now, press 2ndGRAPH to return to the table and you will see an amortization
schedule for the new loan terms.

One final note: Scrolling through the entire table is tedious. If you want to see, for
example, the amortization starting at period 348 (the beginning of the last year of
payments), then you can press 2ndWINDOW and set TblStart to 348. This will recalculate
the amortization and take you to period 348 when you press 2ndGRAPH . You can then
scroll up and down the table starting from that point.

To clear out the table completely, press Y= and go to each line and press the CLEAR

button. That will delete the definition for those list items.

I hope that you have found this tutorial to be useful.

Resources

http://www.investopedia.com/articles/financial-theory/11/corporate-project-valuation-
methods.asp#axzz1m2cnczNg

http://www.tvmcalcs.com/calculator_index

Investopedia Homepage:

http://www.investopedia.com/#axzz1m2cnczNg