Finance Button On Ti 84 - Financial Freedom

The TI-84 Plus series calculators, ubiquitous in high school and college math and finance courses, house a dedicated “Finance” (FINANCE) application. This accessible tool simplifies complex financial calculations, saving students and professionals valuable time and reducing the risk of manual errors. The FINANCE app is activated by pressing the APPS button and selecting “Finance…” from the list. Once open, you’ll find several specialized solvers for common financial problems.

The most frequently used solver is the TVM Solver, short for Time Value of Money. This solver handles calculations involving present value, future value, interest rates, number of compounding periods, and payments. The variables presented are: N (number of periods), I% (interest rate per year), PV (present value), PMT (payment), FV (future value), P/Y (payments per year), and C/Y (compounding periods per year). You input the known values, move the cursor to the unknown variable, and press ALPHA followed by SOLVE (the ENTER key). The calculator then computes the solution.

For instance, imagine calculating the monthly payment on a $200,000 mortgage with a 4% annual interest rate over 30 years. You’d input: N = 360 (30 years * 12 months/year), I% = 4, PV = 200000, FV = 0 (you aim to pay off the loan), P/Y = 12, and C/Y = 12. Leaving PMT blank, you would place the cursor on the PMT line and press ALPHA SOLVE. The calculator would display the monthly payment, being careful to interpret the negative sign (representing outflow of cash).

Beyond the TVM Solver, the FINANCE app includes other useful functions. The I% CONV (interest rate conversion) option converts nominal interest rates to effective rates, and vice versa, considering the compounding frequency. This is helpful when comparing loan options with different compounding schedules. The AMORT (amortization) function allows you to create an amortization schedule for a loan, showing the breakdown of principal and interest payments for each period. You can specify the starting and ending periods to analyze specific portions of the loan’s lifespan. You’ll input similar parameters as the TVM solver, and then specify which payment period you want to start and end with, and it will display information about the principal paid, interest paid, and remaining balance.

While spreadsheets and specialized financial software offer more advanced capabilities, the TI-84’s Finance app provides a convenient and readily available tool for performing fundamental financial calculations. Its ease of use and portability make it an invaluable asset for students learning financial concepts and professionals needing quick calculations on the go. Understanding how to utilize the Finance app effectively empowers users to make informed financial decisions.