Page 3 - FINAL CFA SLIDES JUNE 2019 DAY 2

Session Unit 2: 6. The Time Value of Money
Using a Financial Calculator

2 Types of Calculators allowed—
• TI BAII Plus®(including the BAII Plus Professional); and
• the HP 12C® (including the HP 12C Platinum).

• TI BAII Plus comes preloaded with the periods per year function (P/Y) set to 12.

• Automatically converts the annual interest rate (I/Y) into monthly rates.
• Appropriate for many loan-type problems, but not suitable for the vast majority of the TVM applications.

Please set your P/Y key to “1”: [2nd] [P/Y] “1” [ENTER] [2nd] [QUIT]

Toi check, press:
• [2nd] [P/Y]. The display should read P/Y = 1.0. If it does, press:
• [2nd] [QUIT] to get out of the “programming” mode.

With P/Y set to equal 1,
• I/Y = interest rate per compounding period, and
• N = number of compounding periods under analysis