Great video, but there is an error in example 3. Since payments are made monthly while interest is compounded annually (i.e. payments are more frequent than interest), the annuity is nominal. This problem cannot be solved using the calculator if P/Y isn't changed.
im confused so is the video correct for example 3? and if not why and what is the correct one as for example 4 why is the i/y 2 since its monthly and your p/y u made it only 1
@@jacea5739 No. Example 3 is not correct as is. P/Y is supposed to be set to 12. But in this video, it is assumed that the $400 payments are applied at the end of each year, totaling $4,800.
@@jacea5739 I/Y = 2 in example 4 because 2% is a periodic (monthly) interest rate, not annual. Hence N is counting the number of months (not the number of years).
This is amazing. I spent hours watching my instructor's online lectures on this, and was banging my head against the wall trying to understand this. It was hopeless. You explained it in very simple terms in less than 10 minutes, and now I actually stand a chance on my upcoming exam. I cannot thank you enough.
Thank you for showing the basics-enter your values then select CPT, then what your solving for i.e.PMT. Ugh this calculator has been driving me crazy! Thanks to you I'm solving problems without any issues!
Omg thank you so much I was trying to learn to use the calculator while trying to solve these to understand for the exam and you took the time to save me from frustration, THANK YOU!😩
Thank you so much for this tutorial! I'm taking financial management while in an MBA and this helped me so fast and easier than I'd think. Thank you again 😊🙏🏽
Amazingly clear and concise examples! If only all the youtube video tutorials were this great. Thanks a ton! By the way, your voice and accent are awesome and make this video even better!
Thank you for the video. You explain it very thoroughly. I learned extensively from this video more than my college professor explained it. Thank you!!
You’re a life saver. I’m my finance course my professor was teaching us how to use the financial calculator and she was way too fast. So I UA-camd it abd man you’re literally a life saver
Thank you Joshua, this video helped me immensely. You touched on many points that really clarified everything for me. I sent it to my professor so he could share it with my graduate finance class. The way you include the calculator and show which buttons to press in order to get the answer is absolutely golden. Subscribed!
Amazing video! I greatly appreciate this!!! Doing my business math class and this is my first exposure to a financial calculator and this makes me feel much better. Thanks again!! 🍒
Hello! I just got my financial calculator and this was bothering me, so I went to find out a little more. Essentially, financial calculators follow the cash flow sign conventions. Cash inflows are entered as positive numbers and cash outflows are entered as negative numbers. You can see more of it here!! www.tvmcalcs.com/calculators/baiiplus/baiiplus_page1 Hope this helps :D
What is the rule on multiplying N X 12 AND Dividing the interest rate by 12. How do you know when to make the present value negative in regards to the example on the $25k in the savings account?
At minute 6:16 where Steven's debt is discussed, why don't we compound the 2%? It says 2% per month? In the other example where we calculated the PMT we divided 4% with 12. I don't understand how to make a difference between the two.
Note that the N computed at 6:17 is in months -consistent with 2%. The 4% is annual so it is converted to monthly. I think the approach shown in the video here is better: ua-cam.com/video/6sBNzGM_Qgk/v-deo.html
@@joshemman I have two more questions. 1. How do you know when to set the calculator to the beginning setting? 2. How do you decide whether the amount entered for payment is negative or positive. Sometimes my answer is not good because my sign is not good. Thank you for your time and help.
@@adelnemes73061. You set the calculator to BGN mode if payments are made at the beginning of each period. Otherwise, you leave it in END mode. 2. The sign for PMT does not matter if one of FV or PV is 0. If both FV and PV are not 0, then the sign on PMT must be the same with PV. If you have $500 in an account now and you want to add $50 monthly, then PV and PMT must have the same sign (both + or both -) because they are going in the same direction. FV will have a different sign.
As before, we need to be careful when entering the PV and FV into the calculator. In this case, you are going to invest $20,000 today (a cash outflow) and receive $100,000 in 18 years (a cash inflow). Therefore, we will enter -20,000 into PV, and 100,000 into FV. Type 18 into N, and then press CPT I/Y to find that you need to earn an average of 9.35% per year. Again, if you get Error 5 instead of an answer, it is because you didn't follow the cash flow sign convention.
I got -2,992.38 as the payment despite following your video step by step, I do not know what is causing this. Update: I resolved my issue by resetting my ba 2 plus using : 2nd; reset, enter. After which I got the correct answer.
Thank you, Thank you, Thank you! My professor took the time to mention he downloaded the app on his phone for this calculator but failed to show us how to use it! Well that was pointless of him.
im confused so is the video correct for example 3? and if not why and what is the correct one as for example 4 why is the i/y 2 since its monthly and your p/y u made it only 1
At 5:15, you convert PMT to be in terms of years. What if instead I convert I/Y and N to be in terms of months. So PMT=400 I/Y=6/12=0.5 and N=10x12=120. Plugging these into calculator (with PV same as before) you get -156k. So there's a small discrepancy. Would anyone know why?
I totally understand what you're getting at here Andrei. The difference with this problem is that money is earning interest annually, and not monthly. So we kind of have to wait for a full year to apply the 6%. The discrepancy in your result is due to due to the fact that you are compounding monthly.
Thank you for the response sir. I am curious to know if it is possible to do a "monthly-based" calculation? Could we find some sort of nominal rate and proceed with the calculation?
Sure. 1) Use the 6% to find the FV of the 50K PV -> 89542.38 2) Calculate the nominal rate for the monthly payments -> 5.841060678%. 3) Use the rate in 2) to obtain FV for the 400 PMTS -> 63267.82 4) Add 1) and 3).
@joshemmanuel for example 5, why is PV negative? is it always negative when calculating for i/y? If the 25,000 is in his bank account and it's growing to 32,000 i'm not understanding why it's an outflow
The important thing is that one of PV or FV must be negative. It does not matter which one. The $25 000 is an outflow for Martin because he has to put that money in the bank. It becomes an inflow 5 years later when he withdraws it. But if you’re the bank, the $25k is an inflow.
The content of this video was specifically compiled by Andrew Rossman with the intention of keeping P/Y & C/Y at 1. I normally don't do that as you will notice in my other videos: ua-cam.com/play/PLD3fYc0bAjC-gmXXegedT3l9mLa8YjhK5.html
@@joshemman Hello Joshua, thank you for the prompt reply! I now understand that the purpose of the video was to keep p/y and c/y to 1. However does that mean that the correct answer for example 4 would have to be computed by setting p/y and c/y to 12? Thanks!
@@joshemman Thank you. I believe I understand now. The confusion was with c/y and p/y since I am thinking of their literal meaning of payments per year and compounding per year but since the question is in months c/y and p/y can be seen as compounding per month and payments per a month. Which is the same as setting c/y and p/y to 12 to get 35 months. Thanks again!
The 2% at 6:10 is a periodic interest rate, not nominal. You're right, if it were nominal, it will be 24%. But then you'd have to set P/Y and C/Y to 12.
It's an outflow because the money is leaving you and going to the bank. It becomes an inflow when you get it back. Nonetheless, if you leave PV as positive, then FV has to be negative. The BAII Plus just requires one of them to be negative. Inflows & Outflows are really a matter of perspective. Your outflow becomes the bank's inflow and vice versa.
5:16 I thought PMT is negative since it's an outflow. So I thought PMT = -4800 don't understand why it is positive in the example? Thank you in advance
You're right. PMT is an outflow. Nonetheless, it's all perspective. It's an outflow for John but not for the bank. So if you look at it from the bank's perspective, it's an inflow. Moreover, the reason PMT is positive in this example is simply to match the sign of PV. Note than PV and PMT are going in the same direction. You can't make one positive and the other negative. To appease you I will say ...both PV and PMT should have been negative, then FV will be positive.
Hi Joshua Your Video is very helpful.My question is how did you stitch calculator in your video.What software are you using for using the calculator live. Thanks
The emulator/calculator was placed on the slide and interaction was only with the calculator during the recording. The changing text were added after the recording in Camtasia Studio. The emulator was obtained directly from Texas Instruments.
@@athirahkassim1564 Try resetting the calculator by hitting 2nd and Reset at the bottom right corner of the calculator. then make sure you 2nd CLR TVM again and input information again. Same was happening to me until I did the system reset.
Hi, for example 1 for PMT i'm getting - 2992 despite i'm following all the steps. I believe the issue comes from the setting of my calculator. Could you please help? Thank you so much
Oh, I have found out why, I did not enter '-' in 1000 PMT, that caused the issue. How do I correctly determine every questions' positive and negative quickly? Thank you for this helpful tutorial.
Hi Josh, I have a question. Though it is not related to the problems in this video. I am getting a wrong calculation when I use this method for FV. My calculation continues to be off by about $3000+. When I calculate it manually (the long, written way) my calculation comes out correct, any ideas what I might be doing wrong or a setting I need to correct? Appreciate any feedback!
Great video, but there is an error in example 3. Since payments are made monthly while interest is compounded annually (i.e. payments are more frequent than interest), the annuity is nominal. This problem cannot be solved using the calculator if P/Y isn't changed.
You're right Joshua. There is an assumption missing there ==> The $400 payments are saved up and added to the investment at the end of each year.
Very good video !
im confused so is the video correct for example 3?
and if not why and what is the correct one
as for example 4 why is the i/y 2 since its monthly and your p/y u made it only 1
@@jacea5739 No. Example 3 is not correct as is. P/Y is supposed to be set to 12. But in this video, it is assumed that the $400 payments are applied at the end of each year, totaling $4,800.
@@jacea5739 I/Y = 2 in example 4 because 2% is a periodic (monthly) interest rate, not annual. Hence N is counting the number of months (not the number of years).
This is amazing. I spent hours watching my instructor's online lectures on this, and was banging my head against the wall trying to understand this. It was hopeless. You explained it in very simple terms in less than 10 minutes, and now I actually stand a chance on my upcoming exam. I cannot thank you enough.
Pays thousands for college. Gets taught by Joshua Emmanuel for free on youtube. You are a blessing sir.
You explained this better than the multiple CFA prep providers i've paid hundreds of dollars for, thank you!
learn easier and faster here than I do paying for my college degree
And Joshua doesnt catch an attitude like proffesors
omg true tell me about it 👏👏👏😭😭
Facts
Thank you for showing the basics-enter your values then select CPT, then what your solving for i.e.PMT. Ugh this calculator has been driving me crazy! Thanks to you I'm solving problems without any issues!
Omg thank you so much I was trying to learn to use the calculator while trying to solve these to understand for the exam and you took the time to save me from frustration, THANK YOU!😩
For the first calculation I did exactly what you said on my BA II and I came up with a monthly payment of -$2,848.19
same as u lol... did u set any mode for ur calculator?
@@bigbrother9273 No I did not. I even verified that the decimals were set to 2 places.
Jenny Titus Try to reset
I had the same problem before. I reset the calculator by pressing 2nd +|- enter and I finally got the correct answer. Hope this helps.
And remember to press 2nd FV to clear the history before calculating next question.
Awesome video! I tried following a different one and I think that presenter just wants to be a UA-cam star. This was super helpful. Thank you!
today my teacher teach in the class i nearly give up, i found this then i happy to do my finance course. i really appreciate Joshua.
Thank you so much for this tutorial! I'm taking financial management while in an MBA and this helped me so fast and easier than I'd think. Thank you again 😊🙏🏽
Glad it was helpful!
What the hell ! You help me with one problem that has been haunting me forever ! CLR TVM !
Amazingly clear and concise examples! If only all the youtube video tutorials were this great. Thanks a ton! By the way, your voice and accent are awesome and make this video even better!
Thank you for the video. You explain it very thoroughly. I learned extensively from this video more than my college professor explained it. Thank you!!
You’re a life saver. I’m my finance course my professor was teaching us how to use the financial calculator and she was way too fast. So I UA-camd it abd man you’re literally a life saver
Thank you Joshua, this video helped me immensely. You touched on many points that really clarified everything for me. I sent it to my professor so he could share it with my graduate finance class. The way you include the calculator and show which buttons to press in order to get the answer is absolutely golden. Subscribed!
You are a great teacher. I didn’t understand any of my college instructions but I understood yours. Thank you.
I really like your voice, clear and concise verbiage and the video itself helped me revisit how valuable the TVM functions are on my BA II.
Just bought mine tonight and my exam is tomorrow morning. Thanks for the cram tools!
THIS SAVED MY LIFE OML
This is very helpful! Thank you for creating this video
omg i had the p/y set to 52 for like 2 weeks and i wondered why i could never get the right answers in class, this video saved me!
Thank you Joshua for explaining in such an easy & clear way.
Best tutorial on this topic ever!! Thank you. I was struggling.
I Love your videos and you reply to emails on time thank you so much for your help. I always use your videos for my homeworks. Thank You.
thank you for the simple, straight-forward instruction!
best tutorial on the BA II so far. Thank you so much for posting
Great video. Joshua gets straight to the point, and works through practical examples. Very well done!
This is a great tutorial explaining with button presses exactly how to do basic computations with the BAIIPlus
Thank you so very much! this is the best UA-cam video to understand FV and financial calculator
Thank you! Very informative.
It helps in preparing for the CFA exam.
beautiful I've just caught up 4 weeks of college in just one video
Amazing video! I greatly appreciate this!!! Doing my business math class and this is my first exposure to a financial calculator and this makes me feel much better. Thanks again!! 🍒
best youtube tutorial ive ever watched for school, thank you so much.
Many many thanks...First time I am using my calculator...Ur examples are so clear and easy to understand
Why is 25000 in the last example an outflow?
Hello! I just got my financial calculator and this was bothering me, so I went to find out a little more. Essentially, financial calculators follow the cash flow sign conventions. Cash inflows are entered as positive numbers and cash outflows are entered as negative numbers. You can see more of it here!! www.tvmcalcs.com/calculators/baiiplus/baiiplus_page1
Hope this helps :D
Perfect video! nothing extra and everything you need to know. Very helpful that you solved every type of problem!
Thank you for posting this video Joshua. This simplified calculations for FVM for me.
This is class. You made everything so simple and easy to learn. You sir are a legend
What is the rule on multiplying N X 12 AND Dividing the interest rate by 12. How do you know when to make the present value negative in regards to the example on the $25k in the savings account?
You are a savior. Thanks for your wonderful tutorial
At minute 6:16 where Steven's debt is discussed, why don't we compound the 2%? It says 2% per month? In the other example where we calculated the PMT we divided 4% with 12. I don't understand how to make a difference between the two.
Note that the N computed at 6:17 is in months -consistent with 2%. The 4% is annual so it is converted to monthly. I think the approach shown in the video here is better:
ua-cam.com/video/6sBNzGM_Qgk/v-deo.html
@@joshemman I have two more questions. 1. How do you know when to set the calculator to the beginning setting? 2. How do you decide whether the amount entered for payment is negative or positive. Sometimes my answer is not good because my sign is not good. Thank you for your time and help.
@@adelnemes73061. You set the calculator to BGN mode if payments are made at the beginning of each period. Otherwise, you leave it in END mode.
2. The sign for PMT does not matter if one of FV or PV is 0. If both FV and PV are not 0, then the sign on PMT must be the same with PV.
If you have $500 in an account now and you want to add $50 monthly, then PV and PMT must have the same sign (both + or both -) because they are going in the same direction. FV will have a different sign.
For example 5, why is the 25,000 PV considered an outflow?
Your videos are very helpful for my financial management class
thank you for the lear explanation..you have a new subscriber
Saved my life, thanks
You're very welcome!
As before, we need to be careful when entering the PV and FV into the calculator. In this case, you are going to invest $20,000 today (a cash outflow) and receive $100,000 in 18 years (a cash inflow). Therefore, we will enter -20,000 into PV, and 100,000 into FV. Type 18 into N, and then press CPT I/Y to find that you need to earn an average of 9.35% per year. Again, if you get Error 5 instead of an answer, it is because you didn't follow the cash flow sign convention.
Correct me if I'm wrong but for but for Q3) the correct answer is $94,814.70 since he did not change P/Y to 12 (The $400 payments are made monthly)
Excellent tutorials - Thanks so much Joshua!
Thank you very much, brother. You give excellent information.
Thanks, O'Neil.
Thanks a lot for this tutorial. Super helpful... I was starting to panic a little
Excellent, superb, explanation. You saved my day.
Hi, Joshua. At 2:21, why is I/Y 0.33(4/12)? I suppose I should input annual rate in the I/Y section
In this video, P/Y and C/Y are both set to 1. Therefore, I/Y has to be periodic rate.
@@joshemman ok Thx for your clear explanation!
I got -2,992.38 as the payment despite following your video step by step, I do not know what is causing this.
Update: I resolved my issue by resetting my ba 2 plus using : 2nd; reset, enter. After which I got the correct answer.
Thank you, Thank you, Thank you! My professor took the time to mention he downloaded the app on his phone for this calculator but failed to show us how to use it! Well that was pointless of him.
simple, concise and to the point. Thank you, sir!
how do you change the amount of decimal places the calculator rounds to? I need it to be 4 instead of 2 decimal places
This should help: ua-cam.com/video/0EzVEG7X4o0/v-deo.html
Homie is really out here saving lives
Dope tutorial’s Joshua!
Thank you for your tutorial. It helps a lot to understand how to use calculator.
im confused so is the video correct for example 3?
and if not why and what is the correct one
as for example 4 why is the i/y 2 since its monthly and your p/y u made it only 1
Thank you big time!! -/+ signs were a total pain and you helped me figure.
Thank you! Very helpful.... other videos did not help, but finally able to use my finance calc now for my class
Dude thank you. Just taught me better than my snooty professor could.
Superb...You made my life easier. Thanks
May I ask how to get the emulator. I tried to submit to form on Texas site but fail to do so
At 5:15, you convert PMT to be in terms of years. What if instead I convert I/Y and N to be in terms of months. So PMT=400 I/Y=6/12=0.5 and N=10x12=120. Plugging these into calculator (with PV same as before) you get -156k. So there's a small discrepancy. Would anyone know why?
I totally understand what you're getting at here Andrei. The difference with this problem is that money is earning interest annually, and not monthly. So we kind of have to wait for a full year to apply the 6%. The discrepancy in your result is due to due to the fact that you are compounding monthly.
Thank you for the response sir. I am curious to know if it is possible to do a "monthly-based" calculation? Could we find some sort of nominal rate and proceed with the calculation?
Sure.
1) Use the 6% to find the FV of the 50K PV -> 89542.38
2) Calculate the nominal rate for the monthly payments -> 5.841060678%.
3) Use the rate in 2) to obtain FV for the 400 PMTS -> 63267.82
4) Add 1) and 3).
That was really helpful! Quality content
HIGHLY INFORMATIVE FOR BASIC
Your video saved my life... LOL..... Thank you :)
@joshemmanuel for example 5, why is PV negative? is it always negative when calculating for i/y? If the 25,000 is in his bank account and it's growing to 32,000 i'm not understanding why it's an outflow
The important thing is that one of PV or FV must be negative. It does not matter which one.
The $25 000 is an outflow for Martin because he has to put that money in the bank. It becomes an inflow 5 years later when he withdraws it. But if you’re the bank, the $25k is an inflow.
Great video, clear instructions. Thanks a lot!!
I'm confused, for the first example I thought N will be 54 equivalent to months, isn't N period of monthly payment?
Right answer in problem 3 is:$154.531,76
Correct!
@@joshemman thanks
Great video!
Can you explain why you did not change p/y and c/y to 12 in example 4 (Steven credit card debt). Thanks
The content of this video was specifically compiled by Andrew Rossman with the intention of keeping P/Y & C/Y at 1. I normally don't do that as you will notice in my other videos: ua-cam.com/play/PLD3fYc0bAjC-gmXXegedT3l9mLa8YjhK5.html
@@joshemman Hello Joshua, thank you for the prompt reply! I now understand that the purpose of the video was to keep p/y and c/y to 1. However does that mean that the correct answer for example 4 would have to be computed by setting p/y and c/y to 12?
Thanks!
@@fasihasukhram2389 If you set P/Y and C/Y to 12, then I/Y = 2*12 = 24. Note that the 2% is monthly interest. The answer will be the same.
@@joshemman Thank you. I believe I understand now. The confusion was with c/y and p/y since I am thinking of their literal meaning of payments per year and compounding per year but since the question is in months c/y and p/y can be seen as compounding per month and payments per a month. Which is the same as setting c/y and p/y to 12 to get 35 months.
Thanks again!
Thank you very much! Your teaching is so clear and understandable.
Just bought one from Amazon for my freaking Financial management Mid-term
Hi Emmanuel can you explain why you put 2 as I/Y at 6:10 ? Why didn't you do 24% instead because its monthly interest right? I'm confused, thanks!!!
The 2% at 6:10 is a periodic interest rate, not nominal. You're right, if it were nominal, it will be 24%. But then you'd have to set P/Y and C/Y to 12.
On the last question, why would the savings account value of $25,000 be an outflow and therefor negative?
It's an outflow because the money is leaving you and going to the bank. It becomes an inflow when you get it back. Nonetheless, if you leave PV as positive, then FV has to be negative. The BAII Plus just requires one of them to be negative.
Inflows & Outflows are really a matter of perspective. Your outflow becomes the bank's inflow and vice versa.
5:16 I thought PMT is negative since it's an outflow. So I thought PMT = -4800 don't understand why it is positive in the example? Thank you in advance
You're right. PMT is an outflow. Nonetheless, it's all perspective. It's an outflow for John but not for the bank. So if you look at it from the bank's perspective, it's an inflow.
Moreover, the reason PMT is positive in this example is simply to match the sign of PV. Note than PV and PMT are going in the same direction. You can't make one positive and the other negative.
To appease you I will say ...both PV and PMT should have been negative, then FV will be positive.
When I do this on my BAII Plus Pro I get -3,676.2934. What am I doing wrong?
Hi Joshua Your Video is very helpful.My question is how did you stitch calculator in your video.What software are you using for using the calculator live. Thanks
The emulator/calculator was placed on the slide and interaction was only with the calculator during the recording. The changing text were added after the recording in Camtasia Studio. The emulator was obtained directly from Texas Instruments.
Thanks for your reply Joshua. I appreciate.
In Example 1, why is the interest rate (4% compounded monthly) must be divided by 12?
Why I always can't get the correct answer, I followed the instruction step by step. For the first example, i got -2848.1866
Same
Same too
@@athirahkassim1564 Try resetting the calculator by hitting 2nd and Reset at the bottom right corner of the calculator. then make sure you 2nd CLR TVM again and input information again. Same was happening to me until I did the system reset.
it is because that you set p/y and c/y equals 12, they should be set to 1 in this case.
I keep getting
-3,686.15
Well, you certainly made this a lot easier than Texas Instruments' own tutorial shit...
Thank you very much, Sir.
You are most welcome
Hi Josh, I'm using the exact same Calculator and can't come to the same results as you. Weird
Hi, for example 1 for PMT i'm getting - 2992 despite i'm following all the steps. I believe the issue comes from the setting of my calculator. Could you please help? Thank you so much
Check to see if P/Y and C/Y are set to 1 on your calculator.
You're videos are almost perfectly
Mr. Emmanuel, what could be wrong with my CPT button if it is not computing?
Very clear explanation, thank you so much!
Oh, I have found out why, I did not enter '-' in 1000 PMT, that caused the issue. How do I correctly determine every questions' positive and negative quickly? Thank you for this helpful tutorial.
Your's is the best, no doubt Joshua - keep it up!
Great explanation Thanks
Glad it was helpful!
Does anyone know where I can get this calculator on my computer so I don't have to purchase a physical one?
simple and neat thank you
You should do a video tutorial for stocks and bonds calculations on BA II calculator
Hi Josh, I have a question. Though it is not related to the problems in this video. I am getting a wrong calculation when I use this method for FV. My calculation continues to be off by about $3000+.
When I calculate it manually (the long, written way) my calculation comes out correct, any ideas what I might be doing wrong or a setting I need to correct? Appreciate any feedback!
I'll need to see the problem you're solving.
Very helpful video. Thanks a ton.
Excellent video