White, Mark A.

Bibliographic record and links to related information available from the Library of Congress catalog1. Introduction Calculators vs. Computers 2 Calculator Models Covered in this Book 3 Hewlett-Packard HP-10B 4 Sharp Electronics EL-733A 4 Texas Instruments BA II Plus 4 Notation 4 Housekeeping Functions 5 Memory Registers 5 Display Formats 7 Sign Changes 7 Annuities and Annuities Due 8 Compounding Frequency 8 Troubleshooting 9 2. The Time Value of Money How To Solve Financial Problems 11 Cash Flow Diagrams 12 Identifying Variables and Writing Equations 12 Present Value/Future Value Tables 13 Future Value of a Present Sum 15 Present Value of a Future Sum 17 Future Value of an Ordinary Annuity 18 Annuities Due 20 Present Value of an Ordinary Annuity 21 Solving for an Unknown Interest Rate 23 Solving for an Unknown Number of Periods 24 Multiperiod Compounding 25 Nominal and Effective Rates 25 Annual Percentage Rate (APR) 26 Continuous Compounding Z7 Multiperiod Compounding with the HP-10B and BA II Plus 28 Perpetuities 29 The Principle of Additivity 29 3. Valuation of Financial Instruments The Discounted Cash Flow Model 33 Pure Discount Securities 33 Simple Bond Pricing 34 Bond Yields 37 Semiannual Compounding 39 Semiannual Compounding on the HP-10B and BA II Plus 41 Preferred Stock 41 Common Stock 42 Mortgage Instruments 42 Loan Amortization 43 Balloon Payments 49 Prepaid Points 50 4. Using the Cash Flow Registers Net Present Value 52 Internal Rate of Return 54 Multiple IRRs 56 Profitability Index 57 Equivalent Annual Annuity 59 Present Value of an Uneven Series of Future Cash Flows 61 Valuing a Cash Flow Series at Time t # 0 63 5.Statistics Population vs. Sample Statistics 65 Correcting Errors 69 Weighted Averages 69 Linear Regression 73 6. Additional Problems 81 Answers 97 Bibliography 147 Appendix A. Summary of Cash Flow Diagrams Appendix B. Present Value/Future Value Tables Appendix C. Notation Conversion Table