How to Learn a Financial Calculator at Home
- 1). Read the instruction manual for your calculator thoroughly before beginning to use it. This booklet will save you many headaches and a great deal of frustration during the learning process. It will notify you of any special features that you must be familiar with in order to crunch numbers correctly.
- 2). Learn the basic function of a financial calculator, which is to compute cash flows. There are five variables that you must input in order to compute cash flow. They are: rate of interest, number of compounding periods, payments, initial deposit and final amount. These variables apply to both investment and debt calculations.
- 3). Start running calculations by inputting four of the five variables into the calculator. For example, enter a rate of return, a number of compounding periods, an initial deposit and a periodic payment, and then press the compute key to solve for the final amount.
- 4). Remember to set the number of payments and compounding periods correctly. For example, if you are doing a calculation for a transaction that has monthly payments, make sure that there are 12 payments being entered in per year. Then make sure that the compounding periods and rate of interest are adjusted accordingly, such as being multiplied or divided by 12, depending upon the calculation parameters.
- 5). Purchase a book of problems to work through with your calculator if one is not supplied with it. The manufacturer of your machine will probably publish one that you can purchase separately if it is not included with the calculator itself.
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