Financial calculations on TI-nspire
Finance Solver on your TI-nspire is a great tool for many different types of
financial calculations including compound interest and repayment of loans.
You'll learn how to use it in following examples. For both examples your calculator
must be in calculate mode.
Example 1 – compound interest
Question: You deposit 2500 € in your bank account.
The bank compounds it yearly at interest rate 3% per annum. How much
will you have in your account after 5 years?
To access the Finance Solver press
menu ► Finance
► Finance Solver.
The following dialog box will appear.
You must enter the appropriate values, leaving the box with the unknown empty.
Use tab to move from one box to the other.
| N: | 5 |
| I(%): | 3 |
| PV: | −2500 |
| Pmt: | 0 |
| FV: | |
| PpY: | 1 |
| CpY: | 1 |
| PmtAt: | END |
Explanations:
-
N means the number of times this deposit is compounded. In our case it's 5
(compounded once a year for the following 5 years).
-
I(%) means the interest rate per annum. In our case it's 3.
-
PV is the present value. Enter number −2500.
Pay attention to minus and see the note below!
-
Pmt is your monthly payment (in case of repaying a loan).
In this case there are no monthly payments, so it must be set to 0.
-
FV is the future value. It's unknown, so leave it empty.
-
PpY means number of payments per year and CpY means
number of compound periods per year. In all normal situations these two
settings must be equal. In our case both values are 1, meaning that the
deposit is compounded once a year.
-
PmtAt means payment at end or at the beginning of a period.
This value is usually set to END (bank gives you
interest at the end of the year).
Note: When you give money to your bank, the number entered must be
negative. When you receive money from your bank the number is positive.
In our example PV is negative (you deposit it) and FV will be
positive (you'll get money).
After entering the appropriate values, use tab to move
to the empty box. In our case it's the FV box (the future value is what you're trying to calculate).
Click enter inside this box and your result will appear in this box:
FV = 2898.19 €, meaning that you'll have 2898.19 € in your account.
Press esc to exit the Finace Solver.
Example 2 – repayment of a loan
Question: You take out a loan of 54000 €. You are going to repay this loan in 15 years.
The bank compounds your debt at interest rate 4% per annum. Calculate your monthly payment.
To access the Finance Solver press
menu ► Finance
► Finance Solver.
Enter the following values in the dialog box:
| N: | 180 |
| I(%): | 4 |
| PV: | 54000 |
| Pmt: | |
| FV: | 0 |
| PpY: | 12 |
| CpY: | 12 |
| PmtAt: | END |
Explanations:
-
N means the number of payments. In our case it's 15 × 12 = 180.
(15 years 12 times a year).
-
I(%) means the interest rate per annum. In our case it's 4.
-
PV, the present value is 54000. It's your loan. And it's the money you get from the bank, so it's positive.
-
Pmt is your monthly payment. You must leave it empty, because it's unknown.
-
FV, the future value is 0. You'll pay all your debt till the last cent.
-
PpY and CpY are both 12, because you make 12 payments yearly.
-
PmtAt must be set to END. You'll pay the first payment at the end of the first month.
You must enter the appropriate values, leaving the unknown box empty. In this case it's the
Pmt box. Use tab to move to this box and then click
enter inside this box.
The correct result is −399.43, meaning that your monthly payment will be
399.43 € (minus means that you will have to pay this to the bank).
When you press esc and exit the Finace Solver, the values you've just used are stored in
special variables with names starting in tvm. and you can use them in further calculations in calculator mode.
If you want to know the total amount of all payments in the example above, just calculate:
180 ‧ tvm.pmt and the result is −71897.67, so the total amount you'll have to repay
is 71897.67 €.
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