How to Choose a Financial Calculator

While reading what follows, please remember that I do not sell financial calculators, nor do I receive any kind of remuneration from calculator manufacturers (see below if you would like to help me out by purchasing a calculator from Amazon.com). Furthermore, I have purchased all of the financial calculators on this site with my own money (over many years). Therefore, my suggestions are based solely on 32 years of teaching experience and my personal preferences. Am I biased? Of course. My personal preference is for Hewlett Packard calculators that support RPN data entry (the HP 12C and the HP 17BII). However, RPN is not familiar to most people and I wouldn’t expect you to learn it if you don’t need to.

Major Considerations

When considering which financial calculator to purchase, there are four things to think about:

Why will I be using the calculator?
How much do I want to spend?
Will I be taking financial certification exams (CFP, CFA, Series 7, CPA, SOA)?
Do I need a graphing/scientific functionality?

Let’s take these one at a time, and I’ll provide some recommendations.

Why will I be using the calculator?

Most people first need to acquire a financial calculator because they are taking an introductory financial management course. If getting through this course is your only consideration, then I recommend that you purchase the least expensive model that you can easily find. Generally, this will mean the Hewlett Packard 10BII or the Texas Instruments BAII Plus. These usually cost about \$30 to \$35, though you may occasionally find them on sale for less. These are great financial calculators that will handle everything that you will probably need. However, they are missing a few of the more advanced financial functions that can be nice to have. Most people will probably never notice them missing.

If you are an undergraduate finance major, an MBA student, or a finance professional, then it may very well be a good decision to go for a higher-end model. Still, keep in mind that you are probably more likely to use a spreadsheet for most problems, so a fancy calculator may be more than you need.

How much do I want to spend?

Financial calculators tend to fall into two categories: \$30-\$40 (HP 10BII, TI BAII Plus, Sharp EL-733A), \$60-\$100 (HP 12C, HP 17BII, TI BAII Plus Professional, TI 83 Plus, and TI 84 Plus). If you don’t need lots of memory, a few extra financial functions, graphing, and scientific/math functions then you should probably stick to the lower cost models.

One thing that business students should keep in mind: Many math departments require graphing calculators. Since you will likely need one for math classes, you should get one that will also work well in your finance/accounting classes. The TI 83, TI 83 Plus, or TI 84 Plus are the calculators of choice for you. Keep in mind that a professor in a given course may not allow graphing calculators, so be sure to ask about that if it isn’t mentioned in the course syllabus.

Will I be taking financial certification exams (CFP, CFA, SOA, etc)?

Many certification programs (the good ones) have a policy that prohibits the use of any calculator that can store text. The purpose is to make sure that candidates don’t use the calculator to bring notes into the testing environment. In finance, the major certifications and their calculator policies are the:

CFA Institute (for CFA and CIPM designations) – Only the HP 12C or the BAII Plus are acceptable. The CFA policy and the CIPM policy can be found online (they are the same).
CFP Board of Standards – Requires a calculator that has an IRR function, and that does not have any alphabetic keys. Therefore, it seems that the HP 10B, 10BII, 12C, and 17BII are acceptable. Also, the TI BAII, BAII Plus, BAII Plus Professional would be acceptable. However, the TI 83, 83 Plus, and 84 Plus are not acceptable. You can find the CFP Board of Standards Calculator Policy (or a PDF file) online.
Investments & Wealth Institute (formerly IMCA) CPWA certification exam – The Institute® will allow use of the following calculators on the CPWA Certification Examinations: HP 10b, HP 10bII, HP 10bII Plus, HP 12C, HP 12C Platinum, HP 17B, HP 17BII and HP 17BII Plus, as well as the Texas instrument BA II Plus, BA II Plus Professional and BA II Plus Business Analyst, but not the TI 83/84. Newer and older versions of these calculators will be allowed for use. Candidates are required to clear their financial calculator’s memory prior to the exam. Any notes, including manually programmed formulas, will not be allowed in the testing area. If the calculator has notes/formulas printed on the calculator, or includes any other information, it must be removed or covered by solid color tape. Calculators are subject to inspections by test center staff. Page 7 of CPWA Candidate Handbook has the full calculator policy.
If you are seeking the CPWA or CIMA certifications, take a look at the training programs offered by Yale: Yale CIMA or Yale CPWA. Both are fully online.
FINRA Exams (Series 6, Series 7, Series 63, etc) – As noted in the “Taking the Test at a Testing Center” section, you are not allowed to bring a calculator with you. Instead, one will be provided by the examination center staff upon request.
The Society of Actuaries – Requires that exam takers use a BA-35, BAII Plus (regular or Professional version), or a TI-30X (all versions – this is a scientific calculator with no TVM functions). Any programmable calculator must have its memory cleared prior to taking the exam. A list of acceptable calculators is provided at the bottom of the SOA’s Identification and Calculators page.

I can’t find any definitive calculator restrictions for those that will be taking the CPA exam, other than that you need to know how to use a four-function (add, subtract, multiply, and divide) calculator. I am told that the only calculator allowed for the CPA exam is an online four-function calculator. Therefore, you cannot use your own on the exam. For time value calculations (PV, FV, etc), tables are used.

Do I need a graphing/scientific functionality?

If you need to have graphics and/or scientific and advanced math functions (along with finance functions), then the TI 83 Plus or TI 84 Plus are probably the ones you want to look at. Hewlett Packard makes some spectacular scientific calculators, but their financial calculators don’t do graphics or advanced science and math.

For finance, the graphing functions of calculators aren’t all that useful most of the time. If you need graphics, you are probably better off creating spreadsheets instead. I’m sure that there are some finance professors who would disagree with me on that point.

My Recommendations

Truthfully, for most people, either a HP 10BII or TI BAII Plus will be sufficient and will be the least costly. For students it may be advisable to purchase a TI 83 Plus or TI 84 Plus if their college math department requires a graphing calculator. If not, then stick to the less expensive alternatives or whatever your professor requires.

For banking, real estate, and insurance professionals it may be worth the extra money to purchase an HP 12C. That calculator, despite its age, is still pretty standard in those industries and that makes it easier to find help if you need it.

Personally, I use the HP 12C and HP 17BII on a daily basis. Both of them use RPN (though the 17BII and the 12C Platinum can also be used in algebraic mode), which I prefer. I find that it is often easier and faster to use a formula instead of the TVM keys, and RPN is much better than algebraic data entry for running through formulas. On the other hand, the TI 83 Plus and 84 Plus allow you to do matrix algebra and to enter equations on the screen, complete with parentheses. So, that somewhat mitigates my argument for RPN.

Also, keep in mind that you are likely to use spreadsheets (or custom computer programs) for more advanced financial applications. So if you are doing advanced finance you may not need a calculator at all. Ultimately, Excel is far more powerful than any hand-held financial calculator.

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