Finance Equations On Ti 84

Here's an HTML snippet explaining how to use the finance solver on a TI-84 calculator, formatted as requested:

The TI-84 calculator has a built-in finance solver that can greatly simplify calculations related to loans, investments, and annuities. Access it by pressing APPS, then selecting Finance... and then TVM Solver....

Let's break down the variables you'll encounter:

• N: Represents the total number of compounding periods. Crucially, this *isn't* necessarily the number of years. For example, a 5-year loan with monthly payments would have N = 5 * 12 = 60.
• I%: The annual interest rate, expressed as a percentage. Enter 5 for 5%, not 0.05.
• PV: The present value. This is typically the initial amount borrowed (loan) or invested. Treat this as a positive number if you are *receiving* money, and a negative number if you are *paying* money.
• PMT: The payment amount per period. Again, the sign matters. A loan payment you *make* is negative. A payment you *receive* from an investment is positive.
• FV: The future value. This is the value of the investment or loan at the end of the term. For a loan that's paid off, FV = 0. For a savings goal, this is the target amount.
• P/Y: Payments per year. Common values are 1 (annual), 4 (quarterly), 12 (monthly), and 52 (weekly).
• C/Y: Compounding periods per year. This indicates how often the interest is calculated and added to the principal. Often, P/Y and C/Y are the same. However, they can differ. For example, a loan might have monthly payments (P/Y=12) but interest compounded annually (C/Y=1).
• PMT: BEGIN END This setting is critically important. END (the default) means payments are made at the end of the period (most loans). BEGIN means payments are made at the beginning of the period (some annuities or leases). Always double-check this setting. Select the correct option by highlighting it and pressing ENTER.

Using the Solver:

1. Enter the known values for all the variables.
2. Place the cursor on the variable you want to solve for (e.g., PMT for the monthly payment on a loan).
3. Press ALPHA, then SOLVE (the ENTER key). The solver will calculate the value of the variable and display it on the screen. A small square will appear next to the solved variable to indicate the calculator solved for it.

Important Considerations:

• Cash Flow Sign Convention: Be extremely careful with the signs of PV, PMT, and FV. Incorrect signs will lead to incorrect answers.
• Compounding Periods: Ensure that N, I%, P/Y, and C/Y are consistent with the payment frequency and compounding frequency. A common mistake is using an annual interest rate but monthly payments without adjusting N.
• Clearing the Solver: If you're getting unexpected results, try clearing the solver's memory. You can accomplish this by entering 0 for all the variables before starting a new problem.

By understanding these variables and following these steps, you can effectively use the TI-84's finance solver to tackle a wide range of financial calculations.