How to Use Your Financial Calculator and Which One is Better?

It seems candidates find every little thing to worry about. You are only allowed to use one of two calculators on the exam, the Texas Instruments BA II Plus or the Hewlett Packard 12C, and the forum boards are filled with questions on which one is better and how to best use the calculators.
I never used anything other than the BA II Plus but have heard that the HP is just as good. Both are pretty much the same price and available in most electronic stores. So there really isn’t an answer to the question of which one is better. Probably the best advice is buy your calculator early so you can practice on it during your exam prep.
The calculator cover, keystroke card, a small screwdriver, and loose batteries are the only calculator-related items you will be allowed to bring into the exam. Frankly, if you need to refer to the keystroke card during the exam, you haven’t practiced enough. A lot of people bring in extra batteries and the screwdriver. I bought my calculator before taking the level I exam and used it through the three years of studying. I did bring the screwdriver and spare batteries for the third exam, but didn’t need them. The odds are huge that you will never need to change out the batteries, but you might as well bring them just in case. If you really want to plan ahead, try changing out the battery sometime before the exam so you know what to do.
If you do need to change the battery, do not forget that you will need to reset the decimal places by [2nd] -[format] -(# of decimal places) -[enter]. I usually set mine for four decimal places but I’ve heard others using five as well.
**Remember** Always clear out your prior work before beginning another problem. Don’t think that you will always remember to replace old data with new data, because that one time you do not do it will mean valuable points. Clearing out the memory is easy if you just make it a habit of clearing your work at the beginning of a calculation. [2nd]- [CLR TVM] or [2nd]- [Data] -[2nd] -[Clr work] -[ce/c]
**Remember** In a time value calculation, you need to enter one of the inputs (pv, pmt, fv) as a negative number to represent outflows. The most common is to enter present value [PV] as a negative amount.
Ordinary annuities are received at the end of the period and entered as a normal TVM calculation. Annuity Due calculations must be set up on your calculator to represent cash flow at the beginning of each period. [2nd] -[BGN] -[2nd]-[SET]
It is tempting to neglect the variance and standard deviation formulas because the calculator will compute them for you, but trust me, you need to learn these for the exams (especially some of the more intense stuff at level II). I was never anything like a math whiz but I spent the time to understand what was happening in the formulas and it made everything much clearer and easy to remember.
The user’s guide for the BA II Plus is available here.
Honestly, it’s been a while since I used my calculator for some of the formulas so I’m sure there are uses and tricks that I haven’t mentioned here. Please use the comment form below to include any tips you’ve come across so we can get a good list going.
‘til Friday, happy studyin’
Joseph Hogue, CFA

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