Table Of Contents:

Introduction

Calculators vs. Computers 2(1)

Calculator Models Covered in the Book 3(2)

Hewlett-Packard HP-10B II 4(1)

Texas Instruments BA II Plus 4(1)

Texas Instruments TI-84 Plus 4(1)

Notation 5(1)

Housekeeping Functions 6(5)

Display Formats 6(1)

Memory Registers 7(2)

Sign Changes 9(1)

Annuities and Annuities Due 9(1)

Compounding Frequeny 10(1)

Troubleshooting 11(2)

The Time Value of Money

How to Solve Financial Problems 13(5)

Cash Flow Diagrams 14(1)

Identifying Variables and Writing Equations 14(2)

Present Value/Future Value Tables 16(2)

Future Value of a Present Sum 18(2)

Present Value of a Future Sum 20(2)

Future Value of an Ordinary Annuity 22(3)

Annuities Due 24(1)

Present Value of an Ordinary Annuity 25(2)

Solving for an Unknown Interest Rate 27(1)

Solving for an Unknown Number of Periods 28(1)

Multiperiod Compounding 29(5)

Nominal and Effective Rates 29(2)

Annual Percentage Rate 31(1)

Continuous Compounding 32(1)

Multiperiod Compounding with a Financial Calculator 33(1)

Perpetuities 34(1)

The Principle of Additivity 34(5)

Valuation of Financial Instruments

The Discounted Cash Flow Model 39(1)

Pure Discount Securities 39(1)

Simple Bond Pricing 40(7)

Bond Yields 43(2)

Semiannual Compounding 45(2)

Preferred Stock 47(1)

Common Stock 48(1)

Mortgage Instruments 48(12)

Loan Amortization 49(7)

Balloon Payments 56(1)

Prepaid Points 57(3)

Using the Cash Flow Registers

Net Present Value 60(2)

Internal Rate of Return 62(3)

Multiple IRRs 64(1)

Profitability Index 65(2)

Equivalent Annual Annuity 67(3)

Present Value of an Uneven Series of Future Cash Flows 70(2)

Valuing a Cash Flow Series at Time ≠ 0 72(1)

Statistics

Population vs. Sample Statistics 73(5)

Correcting Errors 75(3)

Weighted Averages 78(5)

Linear Regression 83(10)

Additional Problems 93(74)

Answers 109(58)
Bibliography 167
Appendix A. Summary of Cash Flow Diagrams
Appendix B. Present Value/Future Value Tables
Appendix C. Notation Conversion Table for Leading Finance Texts