baiiplus tutorial

baiiplus tutorial

• Submitted By: msauder
• Date Submitted: 06/20/2016 3:00 PM
• Words: 6429
• Page: 26

﻿BAII Plus Tutorial
The TI BAII Plus is a fairly easy to use financial calculator that 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 to use the calculator. Please note that the design of this calculator has changed slightly over the years, but it works the same way even if it doesn't match my picture.
Initial Setup
Before we get started, we need to correctly (in my view, anyway) set up the calculator.  The BAII Plus comes from the factory set to assume monthly compounding.  That's fine, I suppose, but its better to set it to assume annual compounding and then make manual adjustments when you enter numbers.  Why?  Well, the compounding assumption is hidden from view and in my experience people tend to forget to set it to the correct assumption.  Of course, most people don't recognize a wrong answer when they get one, so they blithely forge ahead.  To fix this problem press 2nd then I/Y and enter 1 when prompted.  Now press Enter and then 2nd CPT to return to a blank screen.  Problem solved.
One other adjustment is important.  By default the BAII Plus 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 2nd then . and, when prompted, enter the number of digits you would like to see displayed.  You must then press the Enter to lock in your choice.  I would press 2nd . 5 Enter to display 5 decimal places.  That's it, the calculator is ready to go.

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 BAII Plus:
Suppose that you have \$100 to invest for a period of 5 years at an interest rate of 10% per...