Finance Button On Ti 83

The TI-83 series of graphing calculators, a staple for many students in algebra, pre-calculus, and introductory statistics courses, includes a dedicated "finance" button that unlocks a suite of tools for solving time-value-of-money problems. This feature, often accessed as the "TVM Solver" function, significantly simplifies calculations related to loans, investments, and savings, eliminating the need for tedious manual calculations or complex formulas.

To access the finance functions, press the APPS button, then select Finance... and then choose TVM Solver... (This menu navigation might vary slightly depending on the specific TI-83 model). This action opens a screen displaying several variables representing key components of financial calculations. Understanding each of these variables is essential for using the solver effectively.

Here's a breakdown of the common variables you'll encounter:

• N: Represents the total number of compounding periods. It's crucial to distinguish between the number of years and the number of compounding periods per year. For instance, a 5-year loan with monthly payments would have N = 5 * 12 = 60.
• I%: Represents the annual interest rate, expressed as a percentage. Remember to enter the rate as a percentage, not a decimal (e.g., enter 5 for 5%, not 0.05).
• PV: Represents the present value, or the initial amount of money. For a loan, this is the amount borrowed. For an investment, it's the initial investment amount. Be mindful of the sign convention: typically, money you receive is positive, and money you pay out is negative.
• PMT: Represents the payment amount per period. This is a crucial input for calculating loan payments or annuity values. Again, pay attention to the sign convention. When taking a loan, your payment is represented by a negative sign, because you are paying it out.
• FV: Represents the future value, or the value of the investment or loan at the end of the term. For a loan, the future value is usually zero, signifying that the loan has been fully paid off. For a savings account, it's the target balance you want to achieve.
• P/Y: Represents the number of payment periods per year. This is usually 12 for monthly payments or 1 for annual payments.
• C/Y: Represents the number of compounding periods per year. This is the frequency at which interest is calculated and added to the principal. It's often the same as P/Y, but not always.
• PMT: BEGIN END This setting determines whether payments are made at the beginning or the end of the period. By default, it is set to END. It is important to choose BEGIN when payments occur at the beginning of the period, as in the case of rent.

To use the TVM Solver, enter the known values for each variable. Leave the variable you want to calculate blank. Then, position the cursor over the blank variable and press ALPHA followed by SOLVE (which is usually the ENTER key). The calculator will then compute and display the value of the unknown variable.

The finance functions on the TI-83 offer a convenient and accurate way to solve a wide variety of financial problems, from calculating mortgage payments to determining the future value of an investment. By understanding the variables and following the correct procedures, students and professionals can leverage this powerful tool to make informed financial decisions.