Some Important Queries Of The Finance Calculator
What are the features that a basic Financial Calculator has?
The has some common features are:
MS – memory store, which stores the current value in memory
MR – memory recall which recalls the stored memory value
M+ - memory plus, which adds the current value to the current memory value
M – Memory minus, which subtracts the current value from the current memory value
MC – Clear the memory value
Compute – if you press the compute button and the payment (PMT) button, the calculator will compute the value for the PMT.
Payment (PMT) – to calculate the number of periods, interest rate per year, and present value are used.
A number of periods – the number of payments used for calculating loan values.
Interest rate per period – if you have a two-year investment that compounds interest monthly, this should be the monthly interest rate.
Future value – the future value of payments and amounts saved in the present value.
Present value – is present value and any amount saved in the future value.
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What do you mean by financial calculator?
A Financial Calculator can Calculate Financial ratios, calculate personal finance metrics and tell you whether you are saving enough money. From the credit card payoff calculator to the payday loan calculator to the car loan payment calculator, all are mentioned as finance calculators that help you make the right financial decisions based on hard and fast numbers.
How to calculate the future value of an investment?
To find the future value of an investment, the steps are shown below:
- Enter the number of periods
- Enter the interest rate
- Enter the present value
- Compute the future value
What do you mean by the Time Value of Money?
The time value of money is a principle of valuation that states that money as of the present date carries more value than the same amount received in the future. The TVM is a concept; a dollar received today is worth more than a dollar received later, which is the fundamental concept in finance.
Two main reasons for backing TVM are:
Opportunity cost – the funds could be used to invest in other projects for higher returns.
Inflation – there is a risk to consider, such as inflation, where the future uncertainty should be costlier than the lower risks on the current date.