How to Use a Finance Calculator
Using a financial calculator can be a daunting task. To use it to its fullest capabilities, you must be aware of the financial functions it can calculate. You must also know the correct order of key strokes to get the correct answers. On most financial calculators, the "N" key is the number of periods in relation to a loan or investment, the "I" key is what you use to input the interest rate, "FV" is the future value of cash floes and "PV" is the present value of the cash flows.
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Instructions
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Refer to the manual to get an overview of the more complicated calculations the calculator is capable of achieving. Think of the variables you need to calculate and input the known values.
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Hit the key of the variable you are trying to compute, the calculator should display the variable you are looking to know. If you need the interest rate, input the amount of periods, the present value and future value and hit "I." It will display the interest rate.
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Enter zero for future value, if looking for info about a loan or mortgage. If you do not enter zero, you may receive an error message. You can also find out the balance of the loan at certain times in its duration.
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Amortize a mortgage using the AMORT key. You can use the price of your home as the present value and your current interest rate and loan length to practice. You should come close to calculating your monthly payment. Otherwise, use any arbitrary loan amount as the present value and input the interest rate to determine the monthly payments. Do not forget to use zero for the future value.
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Check the difference between a loan at 8 and 10 percent. You can simply change the interest rate and hit the PMT key. You will be surprised at how much more the monthly payments will be in this scenario. Use zero as the future value as it will be paid off at that time.
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Tips & Warnings
If you end up with an error message, it usually means you have entered the information in the wrong order. Double check your answers until you get used to using the calculator.
