|Author||Topic: Using Fin Calculator for Annuity|
|How do i use the Financial calculator to calculate annuity?
Formula says FV= PMT/(1+r)power n +......PMT/(1+r)power 1
|Hey it depends on whether u want to cal annuity due or annuity...annuity will be calculated the same way u calculate payments(PMT).|
|CFA allows only two models of calculater BAII Plus and HP12 C. If you are using BA II this is the You can use it like this..
N= 2 yrs
PMT = 2,000
PV = ?
In your calculater(BA II) first clear any data stored in time value of money sheet. to do so
2nd and FV..that will clear the data. On top of fv it is written as clr data.
Now enter 2 and press N,
Then enter 5 and pre I/Y. (not 0.05)
Enter 2000 PMT
Press CPT and press PV
it would display the pv which is in negative. Cause BA II assume cash inflows as positive and outflows as negative
hope this helps
|i don't think that is the right formula to begin with|
CFA Discussion Topic: Using Fin Calculator for Annuity
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!