Welcome to this Time Value of Money calculations
tutorial using the BA II Plus calculator, compiled by Andrew Rossman.
In this tutorial we will only be using these ”Time Value of Money” keys.
That is, we will not be changing P/Y and C/Y values. P/Y and C/Y will be left at their
default values 1. So if you plan on changing them, please see
other videos posted on this channel. We will enter incoming payments as positive
and outgoing payments as negative. You can change the decimals to your desired
number of decimal places by pressing 2nd FORMAT. You can choose 9 to display all decimals but
I will leave it at 2. Press enter, and then 2nd quit.
Before solving any problem, Press 2nd CLR TVM to clear these TVM entries
You can always check the value stored in the TVM entries by pressing the Recall button
and then the TVM key. For example, RCL PV shows 0, and RCL PMT also shows 0 because
I cleared the TVM entries. So let’s look at the first example:
Solving for Payment. Laura takes a 15-year, \$500 000 mortgage, on a new condo. At an interest
rate of 4% (that is compounded monthly), what is the monthly payment?
So we begin by pressing 2nd CLR TVM to clear previously done work.
Since we have monthly payments for 15 years, there will be 15x 12 payments which equals
180 payments in total. So we input 180 N
For the interest rate, we divide the 4% by 12 by pressing 4 divided by 12 equals 0.33
and then press I/Y. Note that there are more decimal places not
displayed by the calculator because it is set to 2 decimal places. Although the remaining
decimals are not displayed, they will still be used in the computations.
Note that it will be incorrect to just type 0.33 and press I/Y. You will be missing the
remaining decimal places not displayed by the calculator.
For Present value we enter 500,000 Present Value
Since we will have 0 balance at the end of 15 years, we enter 0 Future Value
And then CPT Payment. And that gives \$3,698.44
Note that the value is negative because we input the present value as positive.
The next example shows how to solve for Present Value.
Helene is planning ahead for her daughter Paula’s college tuition. Paula begins college
in 5 years and will need \$80,000. How much would Helene have to invest today at 6% compounded
annually to have \$80,000 in 5 years? This is a compound interest problem where
the present value is required. We begin by clearing TVM entries by pressing
2nd CLR TVM. Since the duration is 5 years and interest
is compounded annually, we input 5 for N by pressing 5 N.
For 6% interest rate, we press 6 I/Y Since there are no recurring payments we input
0 PMT. For the future value, we enter 80,000 FV.
And then compute PV Which gives 59,780.65. Next let’s solve for future value.
Josh has an investment account with \$50,000. If Josh earns 6% per year and contributes
\$400 each month, how much will his investments be worth in 10 years?
Note here that interest is compounded per year. Therefore, interest will not be applied
to the \$400 monthly payments until after 1 year. That is, until the payments add up to
12 x 400 which is \$4800. In essence, we actually have 10 conversion
periods over the 10 years. So we input 10 N
For interest rate we input 6 I/Y We input 50,000 PV
And 4800 PMT. We then compute future value which gives 152,810.20
Next we solve for time. Example 4 – Solving for Time
Steven has \$25,000 in credit card debt. His credit card charges 2% in monthly interest
and Steven pays \$1,000 each month toward the balance. If Steven doesn’t make any further
purchases, how many months will it take to fully repay his debt.
At 2% monthly interest rate, let’s input 2 I/Y.
25,000 PV for the debt amount Since the payment is made to reduce the debt,
we input it as a negative value: 1,000 negative, and then PMT
Since the debt will be fully repaid, we input 0 for the future value: 0 FV.
And then compute N which gives 35 months. Next we solve for interest rate Martin’s savings account has \$25,000 today.
In 5 years, the account is worth \$32,000. What is the annual interest rate?
Since interest is compounded annually for 5 years, we input 5 N.
We’ll have to input the 25000 present value as negative because it is an outflow. So we
enter 25 000, negative, PV. We enter 0 PMT as there are no periodic payments.
For future value we enter 3200 FV And then compute interest rate I/Y which gives
5.06%. And that concludes this tutorial.
Thanks for watching.

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• February 2, 2016 at 10:41 am

I don't understand why sometimes you change the p/y and the c/y yet other times you just divide the interest rates. Can you briefly explain how you dissect the problem in order to determine whether you want to change that or just divide the i/y interest rate by 12? It's very confusing, but I can usually get the same answer using each method.

• June 15, 2016 at 3:31 pm

Umm for FV I didn't get that on my calculator it came up as 156,606.2695
:/ everything else before that seemed to be the same on my calculator

• January 18, 2017 at 3:35 am

Thank you so much, a perfect video! Cheers ๐

• February 22, 2017 at 3:23 am

When I do this on my BAII Plus Pro I get -3,676.2934. What am I doing wrong?

• April 9, 2017 at 10:21 am

Your's is the best, no doubt Joshua – keep it up!

• April 11, 2017 at 4:27 am

Thank you!!!

• April 21, 2017 at 1:02 am

that is help full. Ty

• May 8, 2017 at 7:09 pm

On the last question, why would the savings account value of \$25,000 be an outflow and therefor negative?

• May 19, 2017 at 1:33 pm

At 5:15, you convert PMT to be in terms of years. What if instead I convert I/Y and N to be in terms of months. So PMT=400 I/Y=6/12=0.5 and N=10×12=120. Plugging these into calculator (with PV same as before) you get -156k. So there's a small discrepancy. Would anyone know why?

• May 24, 2017 at 3:15 pm

What program did you use to make your videos?

• June 5, 2017 at 12:48 am

• June 22, 2017 at 6:50 pm

double checking the mortgage payment is \$2,848.19 using a BA II plus

• June 27, 2017 at 10:48 am

nice pleasant voice to listen to

• July 13, 2017 at 9:44 pm

Thank you so much! I was in the twilight zone about this subject while in class 3 hrs ago! Thanks again.

• July 20, 2017 at 4:07 pm

how do u input cash flows?

• August 24, 2017 at 8:14 pm

• November 18, 2017 at 11:45 am

Thank you very much.

• December 14, 2017 at 1:08 am

Can i find , by using BA II plus , the balance after 4th payment if the payment is increasing by r% or by โnumberโ ???

• January 1, 2018 at 9:02 pm

In Example #1, I have checked my calculations 3 times and continue to receive the same answer \$2,992.38 which is different to the answer you received. Please clarify the calculations. Thanks.

• January 12, 2018 at 4:11 pm

thank you Joshua!

• January 27, 2018 at 12:06 am

• January 28, 2018 at 10:29 am

Hi Mr Emmanuel, In example 4, I typed in each item same as the example, I keep on getting 20.4753; I do not understand which went wrong? Could you please explain? Thank you

• January 28, 2018 at 10:36 am

Oh, I have found out why, I did not enter '-' in 1000 PMT, that caused the issue. How do I correctly determine every questions' positive and negative quickly? Thank you for this helpful tutorial.

• February 2, 2018 at 9:59 pm

• March 3, 2018 at 8:16 pm

Great video, as always. Thanks

• March 12, 2018 at 1:55 am

You're videos are almost perfectly! Thank you!

• March 29, 2018 at 5:36 pm

• April 4, 2018 at 1:00 am

hey josh if the answers are in negative do we display it as negative as final answer? coz am taking this module exam soon

• April 15, 2018 at 3:58 pm

I really like your voice, clear and concise verbiage and the video itself helped me revisit how valuable the TVM functions are on my BA II.

• April 25, 2018 at 5:26 am

I followed the example…but for the first example i am getting \$3217.16 and not \$3698.44 as you stated. What am i doing wrong?

• April 28, 2018 at 9:15 am

• June 8, 2018 at 8:46 am

Thank you so much for this video!

• June 9, 2018 at 6:59 am

5:16 I thought PMT is negative since it's an outflow. So I thought PMT = -4800 don't understand why it is positive in the example? Thank you in advance

• June 10, 2018 at 2:43 am

Hi Emmanuel can you explain why you put 2 as I/Y at 6:10 ? Why didn't you do 24% instead because its monthly interest right? I'm confused, thanks!!!

• June 10, 2018 at 3:22 am

Thanks!

• June 12, 2018 at 3:21 am

Thank you very much! Your teaching is so clear and understandable.

• July 16, 2018 at 3:39 am

Hi, thanks for your tutorial. Where can I find that emulator?? I really appreciate your help

• July 24, 2018 at 2:25 am

Best tutorial I found for BA II calculator! So helpful. Thank you!!

• September 2, 2018 at 5:23 am

sho me da wey?

• September 14, 2018 at 8:38 pm

tttthhaannkkyoouu soo muuch MAN!!

• September 15, 2018 at 11:17 am

Thank you so much …

• September 20, 2018 at 3:17 am

Thank you soooo much! i had no idea what to do

• September 24, 2018 at 8:13 pm

• September 28, 2018 at 6:23 am

• October 22, 2018 at 9:38 pm

You're videos are almost perfectly

• October 27, 2018 at 10:43 pm

Thank you. was driving myself nuts trying to get it to match. forgot to divid interest rate by 12 and multiply N by 12.

• October 28, 2018 at 6:33 pm

Thank you so much sir!

• November 24, 2018 at 9:02 pm

I love you.

• November 27, 2018 at 7:46 am

Thank you Josh

• November 28, 2018 at 7:20 pm

thank you!

• November 30, 2018 at 2:55 pm

Perfect video! nothing extra and everything you need to know. Very helpful that you solved every type of problem!

• December 15, 2018 at 8:52 pm

Thank you so much

• January 5, 2019 at 5:54 pm

Really helped. thanks fella!

• January 11, 2019 at 12:29 am

Excellent video

• January 13, 2019 at 12:40 pm

hello i have followed all step by im not getting the right number its so weird

• January 28, 2019 at 12:50 am

Mr. Emmanuel, what could be wrong with my CPT button if it is not computing?

• January 28, 2019 at 1:06 pm

simple, concise and to the point. Thank you, sir!

• February 7, 2019 at 2:02 am

Thank you so much for uploading this video! I was having a difficult time trying to use this for my finance class!

• February 15, 2019 at 1:32 am

Thank You so much!!

• February 26, 2019 at 3:10 pm

Dude thank you. Just taught me better than my snooty professor could.

• March 20, 2019 at 5:25 am

Thank you Joshua

• March 21, 2019 at 3:19 pm

Great video, clear instructions. Thanks a lot!!

• March 25, 2019 at 4:00 am

Great video, but there is an error in example 3. Since payments are made monthly while interest is compounded annually (i.e. payments are more frequent than interest), the annuity is nominal. This problem cannot be solved using the calculator if P/Y isn't changed.

• April 21, 2019 at 7:33 am

Oye…I am computing for eg 1 with my ba2 calculator and getting -2848.19. Pls advise

• April 26, 2019 at 9:12 pm

Amazingly clear and concise examples! If only all the youtube video tutorials were this great. Thanks a ton! By the way, your voice and accent are awesome and make this video even better!

• May 3, 2019 at 11:49 am

learn easier and faster here than I do paying for my college degree

• May 12, 2019 at 3:36 am

Well, you certainly made this a lot easier than Texas Instruments' own tutorial shit…

• May 25, 2019 at 8:55 pm

Why I always can't get the correct answer, I followed the instruction step by step. For the first example, i got -2848.1866

• June 13, 2019 at 7:22 am

• June 18, 2019 at 3:10 pm

Thank you so very much! this is the best YouTube video to understand FV and financial calculator

• August 7, 2019 at 12:11 pm

thank you for the simple, straight-forward instruction!

• August 22, 2019 at 3:03 am

Thanks.

• September 9, 2019 at 3:32 pm

Excellent video, thanks a lot. Very clear!

• September 13, 2019 at 4:44 am

thx for saving mi b4 my exam