Making financial calculation easy

Finance Mode

Before you begin to read through this help file, let’s take a look at how easy financial calculations can be with MyCalcAndroid.

Example : Suppose you want to ensure that you can finance your daughter’s college education 14 years from today. You expect that the cost will be about $ 6,000 a year ($ 500 a month) for 4 years. Assume she will withdraw $ 500 at the beginning of each month from a savings account. How much would you have to deposit into the account when she enters college if the account pays 6 % annual interest compounded monthly?

This is an example of a compound interest calculation. All such problems involve at least three of the following quantities:

n : the number of compounding periods.

i : the interest rate per compounding period.

PV : the present value of a compounded amount.

P/YR : the number of period per year.

PMT : the periodic payment amount.

FV : the future value of a compounded amount.

In this particular example:

n is 4 years × 12 periods per year = 48 periods.

i is 6 % per year ÷ 12 periods per year = 0.5 % per period.

PV is the quantity to be calculated — the present value when the financial transaction begins.

P/YR is the number of periods in a year = 12 periods.

PMT is $ 500.

FV is zero, since by the time your daughter graduates she (hopefully!) will not need any more money.

First, we have to switch to the financial mode. Press the 'Mode' button and click on Finance in the new panel.

Keystrokes	Display
CIF	0.00	Clears previous data inside the calculator
*4 Enter 12 n**	48.00	Calculates and stores the number of compounding periods.
6 I/YR	6.00	Stores the periodic interest rate.
12 P/YR	12	Stores the number of periods in a year.
500 PMT	500	Stores periodic payment amount.
PV	-21,396.61	Amount required to be deposited.

Or you can hit the 'Edit' key, fill the table with the known values and hit the PV button.