Time value of money and financial calculator tutorials
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Time value of money and financial calculator tutorials
Strictly speaking, an annuity is a series of equal cash flows, equally spaced in time. However, a graduated annuity (also called a growing annuity) is one in which the cash flows are not all the same, instead they are growing at a constant rate (any other series of cash flows is an uneven cash flow stream). So, the two types…
In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…
This article explains how to calculate the present and future values of graduated annuities using the HP 10BII+ financial calculator. Graduated annuities, where cash flows grow at a constant rate, differ from regular annuities with constant cash flows. The article provides step-by-step instructions for adjusting the interest rate to account for growth and solving for present and future values. It covers both annuities due and regular annuities, with practical examples illustrating the calculations.
The article explains the concept of a "make-whole" call provision in bonds and demonstrates how to calculate the make-whole call price using the HP 10BII+ financial calculator. It contrasts the make-whole call with traditional calls, noting the benefits for investors and issuers. Using an example bond from PPG Industries, it details the calculation process through three methods: TVM keys, the NPV function, and the Bond functions of the calculator. Each method yields the same result, illustrating the present value of remaining cash flows and the call price.
Uneven Cash Flows In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums and regular annuities. In this section we will take a look at how to use the HP 10BII+ to calculate the present and future values of uneven cash flow…
In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums. In this section we will take a look at how to use the HP 10BII to calculate the present and future values of regular annuities and annuities due. A regular annuity is…
If the picture at right doesn’t match your calculator, you may have an original HP 10B or HP10BII (not the + version). These calculators differ slightly, so you may prefer the HP 10B tutorial. The Hewlett Packard 10BII+ is a very easy to use financial calculator that will serve you well in all finance courses. This tutorial will demonstrate how…
In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of annuities. In this section we will take a look at how to use the HP 17BII to calculate the present and future values of uneven cash flow streams. We will also see how to…
In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums. In this section we will take a look at how to use the HP 17BII to calculate the present and future values of regular annuities and annuities due. A regular annuity is…
The HP 17B is a fairly easy to use financial calculator that will serve you well in all finance courses. The 17BII can operate in either RPN (reverse polish notation) or algebraic modes. RPN is better in most cases, so I suggest that you choose that mode if you understand RPN. This tutorial will demonstrate how to use the financial…
In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums and regular annuities. In this section we will take a look at how to use the HP 10B to calculate the present and future values of uneven cash flow streams. We will…
In the previous section we looked at the basic time value of money keys and how to use them to calculate present and future value of lump sums. In this section we will take a look at how to use the HP 10B to calculate the present and future values of regular annuities and annuities due. A regular annuity is…
A bond is a debt instrument, usually tradable, that represents a debt owed by the issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate of interest for a number of years, and then to repay the principal on the maturity date. In the U.S. bonds typically pay interest every six months (semi-annually),…
In the previous section we looked at using the basic time value of money functions to calculate present and future value of annuities (even cash flows). In this section we will take a look at how to use Excel to calculate the present and future values of uneven cash flow streams. We will also see how to calculate net present…
In the previous section we looked at the basic time value of money functions and how to use them to calculate present and future value of lump sums. In this section we will take a look at how to use Excel to calculate the present and future values of regular annuities and annuities due. A regular annuity is a series…