Using Financial Functions on the TI-83 Series Calculator

The TI-83 and TI-83 Plus calculators, while not specifically designed as financial calculators, offer built-in functions to solve common time-value-of-money (TVM) problems. These functions are accessed through the FINANCE menu, making it a useful tool for basic financial calculations. This guide outlines how to use these functions.

Accessing the Finance Menu

First, press the 2nd button followed by the x^-1 button (which has "FINANCE" written above it in blue). This will bring you to the FINANCE menu. From there, select option 1: TVM Solver... by pressing ENTER.

Understanding the TVM Solver

The TVM Solver displays several variables. You'll need to input the values for all but one, which the calculator will then solve for. Here's a breakdown of each:

N: Total number of compounding periods. This is usually the number of years multiplied by the number of times interest is compounded per year.
I%: Annual interest rate. Enter this as a percentage (e.g., 5 for 5%).
PV: Present Value. This is the initial amount of the loan or investment. Enter as a negative number if it's an outflow (e.g., a loan you're taking out) and positive if it's an inflow (e.g., an investment you're making).
PMT: Payment amount per period. Enter as a negative number if you're making payments (e.g., loan payments) and positive if you're receiving payments.
FV: Future Value. This is the value of the loan or investment at the end of the term.
P/Y: Payments per year. This is the number of payments made in a year (e.g., 12 for monthly payments).
C/Y: Compounding periods per year. This is the number of times interest is compounded annually (e.g., 12 for monthly compounding). This value usually matches P/Y.
PMT: END BEGIN. This indicates whether payments are made at the end or beginning of the period. Highlight either "END" (default) or "BEGIN" using the arrow keys and press ENTER to select the correct option. "END" signifies payments made at the end of the period; "BEGIN" signifies payments at the beginning.

Solving for an Unknown Variable

Enter all the known values into the TVM Solver.
Move the cursor to the variable you want to solve for.
Press ALPHA followed by ENTER (which has "SOLVE" written above it in green). The calculator will then calculate and display the value of the unknown variable.

Example: Calculating a Mortgage Payment

Suppose you want to take out a mortgage of $200,000 at an annual interest rate of 4.5% for 30 years, with monthly payments. Here's how you'd set up the TVM Solver:

N: 360 (30 years * 12 months/year)
I%: 4.5
PV: -200000 (Negative because it's money coming to you)
PMT: (Leave blank – this is what we're solving for)
FV: 0 (The loan will be paid off)
P/Y: 12
C/Y: 12
PMT: END

Place the cursor on the PMT line and press ALPHA ENTER. The calculator will display the monthly payment amount, approximately $1,013.35.

Important Considerations

Pay close attention to the sign convention (positive/negative) for cash inflows and outflows. Incorrect signs will lead to incorrect results.
Double-check that P/Y and C/Y are set correctly based on the problem's specifics.
Be aware that the TI-83's financial functions are limited. For more complex financial calculations, a dedicated financial calculator or spreadsheet software is recommended.