Education Technology

# Knowledge Base

## Solution 21590: Unexpected Answer Using the BA II PLUS™ and BA II PLUS™ PROFESSIONAL.

### What may cause an incorrect answer when calculating Time Value of Moneyusing the BA II PLUS and BA II PLUS PROFESSIONAL calculator?

If the BA II PLUS or BA II PLUS PROFESSIONAL calculator is returning an incorrect answer when calculating Time Value of Money, it could be caused by incorrect settings on the calculator or incorrect input from the user. Below is a checklist of procedures to follow if the calculator is returning an answer other than expected.

• Values from a previous problem are stored into the [N], [I/Y], [PV], [PMT] and [FV] memory variables. If these values are not cleared out, they may cause errors in the next calculation. To clear out all Time Value of Money memory variables, press [2nd] [FV].

• Incorrect payments per year (P/Y) and compounds per year (C/Y) settings. When calculating for monthly payments, make sure the calculator is set to solve for 12 payments a year (monthly payments). To do this, press [2nd] [I/Y], input 12 and press [ENTER] [2nd] [CPT]. When computing yearly problems, such as bonds, make sure the calculator is set to solve for 1 payment a year (yearly payments). To do this, press [2nd] [I/Y], input 1 and press [ENTER] [2nd] [CPT]. In special cases, the payments per year may differ from the compounds per year. To input custom values for both, press [2nd] [I/Y], input the desired value and press [ENTER]. This will set the payments per year. Press the [down arrow] key to access the C/Y setting, input the desired value, then press [ENTER] [2nd] [CPT].

• User inputs values incorrectly. The calculator follows the rule of inflow and outflow. In order to signify an outflow, such as a monthly payment, you will need to enter it as a negative number. Inflow, such as a loan from a bank, is considered as such because the money is going from the bank to you. These values are entered as positive numbers. In most cases, [PV] will be entered as a positive value and [PMT] will be entered as a negative value.

• Incorrect payment setting. Payments are usually due at the end of a payment period, such as a mortgage, or at the beginning of a payment period (annuity due). When computing end of payment period calculations, make sure "BGN" is not present on the calculator's display. If "BGN" is present, to remove it, press [2nd] [PMT] [2nd] [ENTER] [2nd] [CPT]. If "BGN" is not present on the display and the user is calculating an annuity due problem, to activate "BGN", press [2nd] [PMT] [2nd] [ENTER] [2nd] [CPT].

For more information on and examples using the BA II PLUS and BA II PLUS PROFESSIONAL calculator, take a look at the BA II PLUS and BA II PLUS PROFESSIONAL guidebooks.