Workshop on BA-II Plus/Pro

by Goldwise Development Ltd.

Authorized Distributor of Texas Instruments

G012 Lee Shau Kee Building, HKUST

5 September 2016
7pm-8pm (English)
Program Flow
ApplicableModels
Basic Operation & Setting
Time Value of Money
Cash Flow Analysis
Useful Worksheets
Q & A
Applicable Models
BA-II Plus BA-II Plus
Professional
Basic Operation & Setting
Basic Operation & Setting
Basic Operation & Setting

Note: a good idea to keep these setting and avoid resetting the BA-II Plus
Basic Operation & Setting
Calculation mode
Normal calculation
TVM Time Value of Money
Worksheet E.g. Cash Flow, Bond, Statistics, etc.

Note: different Clearing Entries in each of the three modes

Important! Clearing entries
For Normal calculation
Press
For TVM
Press
For Worksheet
Press

Note: Clearing entries incorrectly might result in wrong answer

Time Value of Money

Note: Positive and negative cash flow will affect calculation result
Time Value of Money
Example 1 Compound Interest
David is going to deposit $30,000 into bank.
The bank offers him a rate of 1.5% p.a.
How much will he get after 5 years?

Answer
(i)Using scientific calculator approach
$30,000 * (1+1.5%)^5
=$32,318.5201
Time Value of Money
(ii) By BA-II Plus calculator
Time period N Rate I/Y
Present Value PV Future Value ?
Time Value of Money
Example 2 Saving Money for retirement
David hopes to retire 30 years later, therefore he opens an
account with $20,000 and saves $4,000 every month.
If David looks forward to receiving a retirement sum of
$5,000,000, what is the average return of investment that
he should look at?

Present Value = PV = 20,000

Number of Period =N = 360 months
Future Value = FV = 5,000,000
Payment per month = PMT = 4,000
Return of investment = I/Y = ________?
Time Value of Money
Answer (Approach (i) P/Y = 12)
Time Value of Money
Answer (Approach (ii) P/Y = 1)
Time Value of Money
Example 3 - Bond
David is looking at a bond as an investment opportunity.
The current bond price is $945, with face value of
$1,000, coupon rate of 8% p.a. (coupon to be paid every
semiannually) and there are still 3 years before the bond
is due to maturity.

If the market rate is 10%, do you think David should buy

this bond?
Time Value of Money
Bond rate could be determined by TVM

Bond price = PV = 945

Face value = FV = 1,000
Coupon payment = PMT = 40
Remaining period
before maturity =N = 6

Yield of this bond = I/Y = ____ ?

Time Value of Money
Answer
Time Value of Money
Example 4 - Mortgage installment with
amortization
David is going to buy a new apartment, he needs to borrow a
sum of $3,000,000 from the bank. The current prime rate of
the bank is 5.25% and David gets an offer of P-2% over 30
years.

a)How much would David need to pay for the monthly

installment?
b)How much principal has David settled after paying 10
years of installment?
Time Value of Money
Answer
Time Value of Money
For amortization schedule
P1 = Starting period
P2 = Ending period
BAL = Balance of unpaid principal
PRN = Principal paid during the period from P1 to P2
INT = Interest paid during the period from P1 to P2
Time Value of Money
Answer
 Cash Flow Analysis

Note: Be careful that the data entry method is very different from that in TVM
 Cash Flow Analysis
Example 1 - return of an insurance plan
A customer is considering to buy an insurance plan with an
annual premium of $300,000 per year for 5 years. After 20
years, the customer can get back $2,980,000 in one payment.

Please calculate the return rate Initial -300,000

Y1 -300,000
of insurance per year.
Y2 -300,000
Y3 -300,000
Y4 -300,000
Y5~Y19 0
Y20 2,980,000
 Initial -300,000
Cash Flow Analysis Y1
Y2
-300,000
-300,000
Answer Y3 -300,000
(Note: paying premium is negative cash flow) Y4 -300,000
Y5~Y19 0
Y20 2,980,000
 Cash Flow Analysis
Example 2 - return of an investment project
A company pays $7,000 for a new machine, plans a 20%
annual return on the investment, and expects these annual
cash flows over the next six years: Initial -7,000
Y1 3,000
Year 1: Earn $3,000 Y2 5,000
Year 2-5: Earn $5,000 each year Y3 5,000
Y4 5,000
Year 6: Earn $4,000
Y5 5,000
Y6 4,000

Please calculate the Net Present Value (NPV) and the IRR.
 Initial -7,000

Cash Flow Analysis Y1

Y2
3,000
5,000
Answer Y3 5,000
Y4 5,000
Y5 5,000
Y6 4,000
Cash Flow Analysis
Answer
 Cash Flow Analysis
If the $4,000 cash-flow value should be occur in the second
year instead of the sixth. ie:
Initial -7,000
Y1 3,000
Year 1: Earn $3,000
Y2 4,000
Year 2: Earn $4,000 Y3 5,000
Year 3-6: Earn $5,000 each year Y4 5,000
Y5 5,000
Y6 5,000

Please calculate the Net Present Value (NPV) and the IRR.
Cash Flow Analysis
Answer
Cash Flow Analysis
Answer
Useful Worksheet - Memory worksheet
Values could be stored and recalled from Memory 0-9
e.g. To store 111 to key 4
To recall value in key 4

To activate Memory worksheet

Press to browse through value entered.

To store value in particular memory, e.g. M3=21

press

will cancel all the memory in Memory Worksheet.

Useful Worksheet - Date worksheet
When is the 100th days from 5 Sep 2016?

Open date worksheet [2nd] [DATE], [2nd] [CLR WORK]

DT1 Date 1
DT2 Date 2
DBD No. of days between Date 1 and Date 2

DT1=9-5-2016 9.0516 [ENTER]

DBD = 100 [] []100 [ENTER]

(Enter no of days between two dates)

Computer DT2 [] [CPT]

100 days later, it will be 14 Dec, 2016 Wednesday

Question & Answer
 Thank You!
Goldwise Development Ltd.
Authorized Distributor of Texas Instruments
Room 1807, 18/F, Dominion Centre, 43-59 Queens Road East, HK
Tel No: (852) 2529 9183 Fax No: (852) 2527 2547
Email: info@goldwise-hk.com