Financial Calculator Help

• I don't see the calculator!
• Getting started
• Entering numbers
• Setting the number format
• Setting frequency of payments and compounding
• Setting decimal places and rounding
• Setting payments at beginning or end of period
• Creating an amortization schedule
• Clearing and resetting the calculator
• Accuracy

Getting Started

The financial calculator can be used to compare investment alternatives and to solve a variety of financial problems involving loans, mortgages, leases, savings, and annuities. Please see Time Value of Money Concepts for examples.

There are five key variables in time value of money problems: present value, future value, payment, interest rate, and number of periods.  You usually know four of these values and wish to solve for the fifth.  For instance, you may know the loan amount (present value), interest rate, length of the loan in months (periods), and the future value (zero or a balloon payment) and want to find how much your monthly payments will be.  You are probably already familiar with payments, interest rates, and periods.  Present value and future value are general terms, and each industry has its own terms for them.  See present value and future value to learn more.

You can enter any four of these values into the fields at the top of the calculator, and then solve for the fifth by clicking on the button just to the right of the remaining field:

• present value
• future value
• payment
• interest rate per year
• number of periods

These restrictions apply to all TVM problems:

• Payments (or receipts) must all be equal and evenly spaced
• Payments must all occur at either the beginning or end of the period.
• There must be at least one positive and one negative cash flow.
• One value of present value, future value, or payment may be 0.

Entering Numbers

The calculator is based on a cash-flow model.  Funds that you receive should be entered as positive numbers, and funds that you pay out should be entered as negative numbers.  Creating a cash-flow diagram may help you understand the problem better.

Setting the Number Format

The calculator will detect the country and language setting of your browser and expect you to enter numbers in that format. For example, if your browser is set to US English, enter numbers as -1,234.99 or -1234.99.  However, if it is set to German as spoken in Switzerland, you would enter numbers as -1'234,99 or 1234,99.

• click on the OPTIONS button
• the choice box near the bottom will show the language, country, and an example of the current number format.  You can switch to US English if the default is anything else.  

Setting Frequency of Payments and Compounding

The payment and compounding periods do not have to coincide.  For example, you could make monthly payments (PAYMENTS PER YEAR = 12), but interest could be compounded only twice per year (COMPOUNDING PER YEAR = 2)

• click on the OPTIONS button
• enter a new value in the PAYMENTS PER YEAR or COMPOUNDING PER YEAR field 

Setting Decimal Places and Rounding

To adjust the number of decimal places and the type of rounding that appears in the entry fields and the amortization schedule:

• click on the OPTIONS button
• in the SCALE field, enter the number of digits that should appear after the decimal separator.
• check the ROUND HALF UP checkbox  to enable rounding ; de-select the checkbox to disable rounding. When rounding is selected, the value is rounded away from zero if the lost fraction is greater than or equal to .5.  I.E, 1.4 is rounded to 1 and 1.5 is rounded to 2.

Setting Payments at Beginning or End of Period

Payments may be made either at the very beginning or at the very end of all periods.  The default is payment at the end of each period. You must change this default for some problems such as annuities due where the payments occur at the beginning of the period.

To change the setting:

• press the OPTIONS button
• click in the PAY AT END OF PERIOD checkbox to de-select it.

Creating an Amortization Schedule

You can create and amortization table that shows the amount of each payment that is applied to principal and interest, and the ending balance for each period.  Normally, you should solve for PAYMENT just before creating the schedule.

• be sure the display text area is showing. Click on the DISPLAY button if it isn't
• click on the CREATE AMORTIZATION SCHEDULE button at the bottom of the display..
• use the scroll bar to view the report.

Clearing and Resetting the Calculator

• click on the CLEAR button at the bottom of the calculator to zero the five entry fields and clear the display.  No other settings are effected. 
• click the RESET button to zero the entry fields, clear the display, and set all option fields (payments per year, compounding per year, scale, pay at end, etc.) to default values.