Using the Finance App on your TI-84 Calculator

The TI-84 series calculators are equipped with a powerful Finance application, often referred to as the TVM (Time Value of Money) Solver. This application makes solving common financial problems like loan calculations, investment returns, and savings projections significantly easier. Instead of relying on complex formulas and manual calculations, you can input known values and the calculator will solve for the unknown variable.

Accessing the Finance App

To access the Finance app, press the APPS button on your TI-84. Scroll down to "Finance..." and press ENTER. This will bring you to a menu. Choose "TVM Solver..." and press ENTER again. This opens the main TVM Solver screen.

Understanding the Variables

The TVM Solver presents several variables that need to be populated with relevant information:

• N: The total number of compounding periods. This is often the number of years multiplied by the number of times interest is compounded per year.
• I%: The annual interest rate, entered as a percentage (e.g., 5 for 5%).
• PV: The present value. This is the initial amount of money, such as the loan amount or the initial investment. Enter it as a positive number if you are receiving money and negative if you are paying out money.
• PMT: The payment amount per period. This is typically the periodic payment for a loan or the regular deposit into a savings account. Again, use a negative number if you are paying out money and positive if you are receiving money.
• FV: The future value. This is the value of the investment or loan at the end of the time period.
• P/Y: Payments per year. This indicates how many payments are made each year (e.g., 12 for monthly payments, 1 for annual payments).
• C/Y: Compounding periods per year. This indicates how many times interest is compounded each year. It usually matches P/Y.
• PMT: END BEGIN: This determines when payments are made. END signifies payments at the end of the period (common for loans). BEGIN signifies payments at the beginning of the period (common for annuities due).

Solving for Unknown Variables

Once you have entered all the known values, move the cursor to the variable you want to solve for and press ALPHA ENTER (SOLVE). The calculator will compute the unknown value and display it on the screen.

Example: Loan Calculation

Let's say you want to take out a $10,000 loan at an annual interest rate of 6% for 5 years with monthly payments. To find the monthly payment:

• N = 60 (5 years * 12 months/year)
• I% = 6
• PV = 10000
• PMT = ? (This is what we are solving for)
• FV = 0 (The loan will be paid off)
• P/Y = 12
• C/Y = 12
• PMT: END

After entering these values and solving for PMT, you'll find the monthly payment is approximately -$193.33. The negative sign indicates that you are paying out this amount.

Important Considerations

Remember to clear the TVM Solver before each new problem to avoid errors from previous entries. Use the sign conventions carefully (positive for inflows, negative for outflows). The TI-84's Finance app is a powerful tool, but it's crucial to understand the underlying financial concepts to interpret the results correctly. Consult financial professionals for personalized advice.