3 Time Value of Money

The examples in the following sections are calculated with the Mode menu preferences in their default settings, unless otherwise noted. For more information about basic features and setting preferences, see Chapter 1, Basic Features.

Time Value of Money (TVM) Keys

Cash flow diagrams are useful tools for analyzing financial situations, as they help you identify the TVM functions needed to resolve your problem. A cash flow diagram is a drawing with a set of vertical arrows arranged on a horizontal line. The horizontal line represents the period of time from the beginning of the financing to the end. The vertical arrows represent the money or cash flows at certain times throughout the period. The arrows' length is proportional to the cash flow amount each arrow represents; a longer arrow indicates a larger amount, a shorter arrow, a smaller amount. Each arrow's position on the line represents the time at which the cash flow occurs. The orientation of the arrow, up or down, represents the "direction" of the cash flow: up for money received, down for money paid out. See Figure 1.

(PV) Loan amount-

(Beg) (End) For payments occurring at the

money received is

beginning or end of the compounding period

positive

 

 

 

 

 

 

 

 

Q(P/YR) Payments per year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PMT

1

PMT

2

PMT

3

PMT

4

PMT

5

PMT

6

(PMT) Amount paid out in

(N) Number of payments

(FV) Final loan

equal payments at regular

or compounding periods

value (if any)

intervals

 

 

Figure 1 Cash Flow Diagram Example with Corresponding TVM Keys

The TVM functions of the calculator can solve problems with at least one cash flow, and problems in which all the cash flows, except the first and last, are of the same value. To solve other types of cash flows, refer to Chapter 4, Canadian Mortgages: TVM Canada, or Chapter 5, Cash Flows.

Time Value of Money 27

Page 34 Page 36
Page 35
Image 35
HP 30b Professional, 20b Consultant Financial manual Time Value of Money TVM Keys
Page 34 Page 36

30b Professional, 20b Consultant Financial specifications

The HP 30b Professional calculator is a versatile tool designed specifically for business professionals, engineers, and educators. This reliable calculator merges advanced technologies with user-friendly features, enabling users to perform complex calculations with ease. The HP 30b is appreciated for its robust design and functionality, making it a top choice among those who require a dependable calculating device for various applications.

One of the standout features of the HP 30b is its capability to handle both RPN (Reverse Polish Notation) and algebraic entry modes. This flexibility allows users to choose the input method that best suits their preferences, enhancing productivity and minimizing calculation errors. The calculator also boasts a large, high-resolution display that ensures clarity when navigating through calculations and results.

The HP 30b comes equipped with essential business functions that include financial calculations, cash flow analysis, and statistical functions, all of which are invaluable in professional settings. Users can seamlessly compute interest rates, perform amortization schedules, and evaluate loan payments, making it an indispensable asset for finance-oriented individuals.

Another key characteristic is its programmable functionality. The HP 30b allows users to create custom programs tailored to specific tasks, which can save time and reduce manual entry errors. This programmable capability is especially beneficial for repetitive calculations, providing a significant efficiency boost in ambiguous or multi-step operations.

The durable construction of the HP 30b ensures longevity while the compact design makes it portable and convenient for on-the-go calculations. Additionally, the calculator features an energy-efficient design, which includes a long-lasting battery life, reducing the need for frequent replacements.

With a straightforward key layout and intuitive interface, the HP 30b is designed with user experience in mind. Whether in a classroom, office, or fieldwork scenario, users can easily navigate functions and access the features they need quickly. The HP 30b Professional calculator is truly an impressive blend of technology and practicality, making it an essential tool for anyone needing reliable performance in their daily calculations.
Top Page Image Contents