Back in college there were only a few things that were very important to the success of my day. One of them was my dear sweet Sheconomist, another was a working car, and the last one was a financial calculator.
On most days I got to see and talk to my Sheconomist, most days my car would be working, but EVERY day I had my financial calculator. Why did I have one? I majored in finance.
I’ve said before that what sets me apart from other personal finance blogs is the fact that I stumbled into the interest by way of my education. Most PF blogs are started by people interested in getting out of debt. They have a story to tell. They are almost always good stories, but that just ain’t me. Instead, I’ve got some serious geek cred, and it comes in the form of the Texas Instruments BA II Plus.
This calculator does most of the same functions as normal calculators but it does a number of important things for 
finance professionals. Look at the 3rd row. The buttons read N, I/Y, PV, PMT, and FV. These are the most important buttons in all of finance. Why? Because they calculate the Time Value of Money (TVM).
With these five buttons you can show the world the magic of compounding interest. Here’s what they mean:
- N: Time
- I/Y Interest Rate
- PV: Present Value
- PMT: Payment
- FV: Future Value
I’m not going to explain how to use the calculator, but I will explain what it can do. Imagine you have $100,000 invested in a 3 year CD paying 4.22%. You want to know how much it will be worth when it’s all said and done. Plug the $100k in PV, 3 for N, and 4.22 for I/Y. Hit the CPT button and FV and it will calculate how much you’ll have when the CD expires.
It’s not just for CDs, you can calculate investment returns, mortgage payments, what % you need to return each year to have X dollars in retirement, the list is endless.
I used this calculator every day in class and used it for fun just to play with numbers. The reason I’m telling you about this today is because of the picture above. Technology minded people would notice that the picture above is no calculator, it’s a screenshot from an iPhone. It’s my iPhone to be specific, and I found a free financial calculator app this week that mimics the TI BA II Plus perfectly. I’m so pumped to have this on my phone, it’s sad but true. Now I can have this calculator with me wherever I am. You can make fun of me all you want but when you’re known as the money guy around social circles, it comes in handy. Check out the app for yourself if you have an iPhone or iPod Touch (it’s free and you can find instructions on the web how to use it). If not, pick up the calculator.
Oh, one last thing. I learned while writing this post TI has an updated version! So cool!.
 By The Weakonomist |
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Said,
Everyone at my office uses these calcs…I always have to run to my trusty Excel.
My Journey’s last blog post..Random Letters After an Advisor’s Name isn’t the End All, but it may help