Financial Calculator Part 1 - Setting up

Hello everyone. This is Walter Adams and welcome to part one of your calculator series what we're going to do in this part is simply set up our calculators to make sure that we are set to the same compounding periods often times it's a point of frustration with people that they will pull their calculators out of the box they will put in the same exact numbers I do in the same keys and yet they'll come up with different answers now the reason for that is typically that we are set to different compounding periods many times out of the box the calculators are set to a monthly compounding 12-month 12 components per year such as we would use in a mortgage calculation or a car payment now what we are going to do in this series is do everything based on one compounding period per year meaning that interest is paid at the end of one year and.

The first thing that you need to know about your calculator if you follow my cursor is that you have two sets of letters on each key the white letter at the top is the key that you're normally using if you don't do anything if you just press the button you'll be using the white functions you'll see that you have gold letters underneath and these are the second set of functions you have for each key now what I want you to notice is is that down here you have a gold button and this gold button is what activates or allows us to use the bottom gold keys of each function.

If I press the gold button I'm now able to use the gold keys and I know that because up here in my window I see shift meaning I have shifted from using the top functions to using the bottom functions now with that in mind I want you to do something for me I want you to hit your gold button and I want you to hit your see all. This means clear all clear all your data out of your calculator now when I press it I want you to look up into my screen and I want you to see what it says in my screen when I hit clear all it says 1p per year now I'm going to do that again look at my screen I'm going to hit the gold button and I'm going to hit clear all 1p per year now when you do that if you see any other number other than one P per year we are set to different compounding periods and we will not get the same answers when we perform these calculations if you are not set to one pay period per year here's what I want you to do it's very simple all you have to do is come over here and click on the 1 come over to your gold button and click your gold button now I want you to go up after you have clicked the gold button to below the PMT key where it says gold letters P per year and I want you to click that you've now entered 1 as your P per year or your payments per year now come down and do your check your gold button clear all and you'll see that you're on one pay period per year that's all there is to it now the only other thing that could be off that we're not synchronized on would have to do with these gold letters beginning and end right here now if you don't see any writing in your screen up here your your okay. However, if I hit my gold button and I hit the beginning and end keel here and I now see the word begin in my screen I'm set on begin mode now we'll get into that with annuities do that's where interest pays at the beginning of the period instead of the end which is not what we typically work with we typically work with you put money in the bank and at the end of the compounding period you're paid interest not at the beginning.

If you are set on begin you're also out of sync with what I have and I'd like you to hit the gold button come over and hit your beginning and and you will you won't see II nd you won't see n you'll just see nothing that means that you're on the end mode.

If you are a gold button clear all one pay period per year and you do not see the word in a beginning begin up here then we should be in sync and our calculators should be ready to go and ready for the next section.

If you did all that and your your synchronized with me you understand all that congratulations that's your first lesson and you're now ready to go into part two where we're going to start doing some exciting calculations thank you very much for joining me I look forward to seeing you in part two you.

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