Texas Instruments BAII Plus TVM Emulator
Time Value of Money (TVM) Calculation Tool
Result
Understanding the BAII Plus TVM Logic
The Texas Instruments BAII Plus is the standard financial calculator for professionals and students, specifically those pursuing the CFA designation. Its core strength lies in the Time Value of Money (TVM) keys, which allow for solving complex financial problems involving loans, annuities, and investments.
Important Note on Cash Flow Direction: Like the physical BAII Plus, this calculator respects the sign convention. Money leaving your pocket (outflow) should be entered as a negative number. Money entering your pocket (inflow) should be positive. For example, if you are depositing $1,000 into a bank, the PV is -1000. If the bank gives you back $1,200 later, the FV is 1200.
Variable Definitions
| Key | Meaning | Description |
|---|---|---|
| N | Number of Periods | The total number of payment periods (e.g., years × payments per year). |
| I/Y | Interest per Year | The nominal annual interest rate (entered as a whole percentage, e.g., 5 for 5%). |
| PV | Present Value | The value of a cash flow at the beginning of the transaction (Time 0). |
| PMT | Payment | The amount of the periodic payment that occurs in each period. |
| FV | Future Value | The value of a cash flow at the end of the specified number of periods. |
Standard Calculation Examples
Example 1: Monthly Mortgage Payment
Suppose you take a $300,000 loan (PV = 300,000) at 4.5% annual interest (I/Y = 4.5) for 30 years. Since payments are monthly, P/Y = 12 and N = 360 (30*12). To find the payment, you solve for PMT. Ensure FV = 0 (loan paid off). Result: ~ -1,520.06.
Example 2: Investment Growth
You invest $10,000 (PV = -10,000) today in an account earning 7% annually (I/Y = 7) for 10 years (N = 10, P/Y = 1). You make no monthly payments (PMT = 0). What is the Future Value? Result: ~ 19,671.51.
Pro Tip: P/Y and I/Y Correlation
On a physical BAII Plus, the calculator divides the I/Y by the P/Y setting internally. This emulator follows that logic. If your P/Y is 12 (monthly), and you enter 6 for I/Y, the math uses 0.5% (0.005) per period.