This is a function-by-function guide: every calculation the CFA exam expects, with the exact keystroke sequence for both approved calculators and a worked example for each.
2nd → [RESET] → ENTER. HP 12C: turn off, hold −, press ON. And always verify payment mode (END) and the payments-per-year setting before TVM work.TI BA II Plus Professional
The TI BA II Plus Professional is the most widely used CFA calculator. Before solving TVM problems, verify P/Y = 1 (payments per year) for annual problems, or set it to the correct frequency (e.g. 12 for monthly). Access with 2nd → [P/Y]. Every worksheet is cleared with 2nd → [CLR WORK], and you move between a worksheet’s variables with the ↑ / ↓ keys.
Function 1: Time Value of Money (TVM)
Keys: N · I/Y · PV · PMT · FV · CPT. Enter the four known values and press CPT plus the unknown key. Always clear first with 2nd → [CLR TVM]; enter outflows as negative with +/−.
Example: mortgage payment (Quantitative Methods) for a $200,000 mortgage at 6% compounded monthly over 30 years.
| Step | Keys | Display |
|---|---|---|
| Set P/Y to 12 | 2nd [P/Y] 12 ENTER | P/Y = 12.00 |
| Return to standard mode | 2nd [QUIT] | 0.00 |
| Enter N (30 × 12) | 360 N | N = 360.00 |
| Enter annual rate | 6 I/Y | I/Y = 6.00 |
| Enter loan amount | 200000 PV | PV = 200,000.00 |
| Set FV to zero | 0 FV | FV = 0.00 |
| Compute payment | CPT PMT | PMT = −1,199.10 |
Function 2: Cash Flows → Net Present Value (NPV)
Keys: CF → enter cash flows → NPV → enter rate → CPT. Clear with 2nd → [CLR WORK], enter CF0 as a negative, then each cash flow with ENTER and ↓ (skip the F0n/Fnn frequency prompt with a second ↓ when each flow occurs once).
Example: a project costs $10,000 and returns $3,000, $4,000, $5,000 over three years; required return 10%.
| Step | Keys | Display |
|---|---|---|
| Open Cash Flow worksheet | CF | CF0 = 0.00 |
| Clear worksheet | 2nd [CLR WORK] | CF0 = 0.00 |
| Initial investment | 10000 +/− ENTER ↓ | CF0 = −10,000.00 |
| Year 1 | 3000 ENTER ↓ ↓ | C01 = 3,000.00 |
| Year 2 | 4000 ENTER ↓ ↓ | C02 = 4,000.00 |
| Year 3 | 5000 ENTER ↓ ↓ | C03 = 5,000.00 |
| Open NPV, enter rate | NPV 10 ENTER ↓ | I = 10.00 |
| Compute NPV | CPT | NPV = −210.37 |
On the Professional, pressing ↓ past NPV also computes NFV (net future value), and the cash-flow list feeds the payback (PB) and discounted-payback (DPB) outputs.
Function 3: Cash Flows → Internal Rate of Return (IRR)
IRR uses the same cash flows you just entered in the Cash Flow worksheet, so no re-entry is needed. Press IRR then CPT.
| Step | Keys | Display |
|---|---|---|
| Open IRR (cash flows still stored) | IRR | IRR = 0.00 |
| Compute | CPT | IRR = 8.90 |
The Professional also computes MOD (modified IRR): press IRR, then ↓ to enter a reinvestment rate (RI), then ↓ to MOD and CPT.
Function 4: Amortization Schedule
Keys: solve the loan in TVM first, then 2nd → [AMORT]. Set the payment range P1 (first payment) and P2 (last payment), then scroll with ↓ to read BAL (remaining balance), PRN (principal paid in the range) and INT (interest paid in the range).
Example: the first year (payments 1–12) of the $200,000 mortgage solved above (PMT = −1,199.10 already in the TVM keys).
| Step | Keys | Display |
|---|---|---|
| Open Amortization worksheet | 2nd [AMORT] | P1 = 1.00 |
| First payment of the range | 1 ENTER ↓ | P1 = 1.00 |
| Last payment of the range | 12 ENTER ↓ | P2 = 12.00 |
| Remaining balance | ↓ | BAL = 197,543.98 |
| Principal paid, year 1 | ↓ | PRN = −2,456.02 |
| Interest paid, year 1 | ↓ | INT = −11,933.19 |
Function 5: Bond Price and Yield to Maturity
The most reliable exam approach uses the TVM keys directly (avoiding the Bond worksheet’s date entry). Example: an 8% semiannual coupon bond, 5 years to maturity, $1,000 par, 6% required yield:
| Step | Keys | Display |
|---|---|---|
| Set P/Y to 2 (semiannual) | 2nd [P/Y] 2 ENTER 2nd [QUIT] | 0.00 |
| Enter N (5 × 2) | 10 N | N = 10.00 |
| Enter annual yield | 6 I/Y | I/Y = 6.00 |
| Semiannual coupon (8% × 1000 ÷ 2) | 40 PMT | PMT = 40.00 |
| Par value | 1000 FV | FV = 1,000.00 |
| Compute price | CPT PV | PV = −1,085.30 |
PV and CPT I/Y. Reset P/Y to 1 afterwards.For settlement-date pricing with accrued interest, use 2nd → [BOND] and enter SDT, CPN, RDT, RV, then compute YLD or PRI. Dates use mm.ddyy format.
Function 6: Interest Rate Conversion (Nominal ↔ Effective)
Keys: 2nd → [ICONV]. The worksheet holds three variables: NOM (nominal / stated rate), EFF (annual effective rate) and C/Y (compounding periods per year). Enter the two you know and CPT the third.
Example: a bank account pays 12% nominal compounded monthly. Effective annual rate (EAR)?
| Step | Keys | Display |
|---|---|---|
| Open Interest Conversion worksheet | 2nd [ICONV] | NOM = 0.00 |
| Enter nominal rate | 12 ENTER | NOM = 12.00 |
| Move down to C/Y | ↓ ↓ | C/Y = 1.00 |
| Enter compounding periods | 12 ENTER | C/Y = 12.00 |
| Move up to EFF and compute | ↑ CPT | EFF = 12.68 |
Function 7: Depreciation
Keys: 2nd → [DEPR]. Pick the method with 2nd → [SET] (cycles SL, SYD, DB, DBX …), then scroll with ↓ to enter LIF (life in years), M01 (starting month), CST (cost), SAL (salvage) and YR (year to compute). The calculator auto-computes DEP (this year’s depreciation), RBV (remaining book value) and RDV (remaining depreciable value).
Example, straight-line: a $50,000 asset, $5,000 salvage, 5-year life, placed in service in January. Year 1?
| Step | Keys | Display |
|---|---|---|
| Open Depreciation worksheet | 2nd [DEPR] | SL |
| Confirm straight-line method | 2nd [SET] (until SL) | SL |
| Life in years | ↓ 5 ENTER | LIF = 5.00 |
| Starting month (January) | ↓ 1 ENTER | M01 = 1.00 |
| Cost of asset | ↓ 50000 ENTER | CST = 50,000.00 |
| Salvage value | ↓ 5000 ENTER | SAL = 5,000.00 |
| Year to compute | ↓ 1 ENTER | YR = 1.00 |
| Depreciation this year | ↓ | DEP = 9,000.00 |
| Remaining book value | ↓ | RBV = 41,000.00 |
| Remaining depreciable value | ↓ | RDV = 36,000.00 |
YR and scroll again for each subsequent year; the schedule is done when RDV reaches zero.Function 8: Statistics and Linear Regression
Keys: 2nd → [DATA] to enter values, 2nd → [STAT] to read results; clear old data with 2nd → [CLR WORK]. For a single variable, enter each point as X and leave its frequency Y at 1. Use 2nd → [SET] in the STAT screen to pick 1-V (one-variable) or LIN (linear regression).
Example: annual returns of 10, 15, 8, 12, 5 (%). Mean and sample standard deviation?
| Step | Keys | Display |
|---|---|---|
| Open data entry, clear | 2nd [DATA] 2nd [CLR WORK] | X01 = 0.00 |
| Enter each return (Y freq = 1) | 10 ENTER ↓ ↓ 15 ENTER ↓ ↓ … 5 ENTER | X05 = 5.00 |
| Open statistics, choose 1-V | 2nd [STAT] 2nd [SET] (until 1-V) | 1-V |
| Number of points | ↓ | n = 5.00 |
| Mean | ↓ | x̄ = 10.00 |
| Sample standard deviation | ↓ | Sx = 3.81 |
Sx) = 3.81%. The next scroll gives the population standard deviation (σx) = 3.41%.Linear regression (beta, factor models): enter paired data as X (independent) and Y (dependent), then set the STAT method to LIN. Scrolling now also reveals a (intercept), b (slope) and r (correlation). For a market/stock return pair, b is the stock’s beta and r its correlation with the market.
HP 12C Platinum
The HP 12C uses Reverse Polish Notation (RPN) by default: enter numbers first, then the operation, separating two numbers with ENTER. Notation below: f = gold shift, g = blue shift; enter outflows with CHS (change sign); clear the financial registers with f CLEAR FIN and everything (including cash-flow and statistics registers) with f CLEAR REG. The shortcut g 12÷ divides the displayed rate by 12 and stores it in i.
Function 1: Time Value of Money (TVM)
Keys: n · i · PV · PMT · FV. Unlike the TI, the HP requires you to divide the annual rate by periods per year before entering i. Compute any variable by pressing its key after the other four. Same mortgage example:
| Step | Keys | Display |
|---|---|---|
| Clear financial registers | f CLEAR FIN | 0.00 |
| Enter N (360 months) | 360 n | 360.00 |
| Monthly rate (6 ÷ 12) | 6 g 12÷ | 0.50 |
| Enter PV | 200000 PV | 200,000.00 |
| Enter FV | 0 FV | 0.00 |
| Compute PMT | PMT | −1,199.10 |
Function 2: Cash Flows → Net Present Value (NPV)
Keys: g CF0 for the initial outlay, g CFj for each later flow, the rate into i, then f NPV. Repeated identical flows can be counted with g Nj.
Same project: initial outlay −$10,000; $3,000, $4,000, $5,000; discount rate 10%.
| Step | Keys | Display |
|---|---|---|
| Clear all registers | f CLEAR REG | 0.00 |
| Enter CF0 | 10000 CHS g CF0 | −10,000.00 |
| Enter CF1 | 3000 g CFj | 3,000.00 |
| Enter CF2 | 4000 g CFj | 4,000.00 |
| Enter CF3 | 5000 g CFj | 5,000.00 |
| Enter discount rate | 10 i | 10.00 |
| Compute NPV | f NPV | −210.37 |
Function 3: Cash Flows → Internal Rate of Return (IRR)
With the cash flows still stored in the CF0/CFj registers, just press f IRR.
| Step | Keys | Display |
|---|---|---|
| Compute IRR (flows already stored) | f IRR | 8.90 |
Function 4: Amortization Schedule
Keys: load the loan (i periodic rate, PV principal, PMT payment as a negative), set g END, key the number of payments, then f AMORT shows interest, x⇄y shows principal, RCL PV shows the remaining balance.
Example: the first year (12 payments) of the same $200,000, 6% monthly, 30-year mortgage.
| Step | Keys | Display |
|---|---|---|
| Clear financial registers | f CLEAR FIN | 0.00 |
| Monthly rate (6 ÷ 12) | 6 g 12÷ | 0.50 |
| Loan amount | 200000 PV | 200,000.00 |
| Payment (negative) | 1199.10 CHS PMT | −1,199.10 |
| Set END mode | g END | −1,199.10 |
| Amortize 12 payments → interest | 12 f AMORT | INT = −11,933.19 |
| Principal portion | x⇄y | PRN = −2,456.01 |
| Remaining balance | RCL PV | BAL = 197,543.99 |
12 f AMORT again for year two; the HP picks up where it left off.Function 5: Bond Price and Yield
The HP’s f PRICE / f YTM functions require settlement and maturity dates; for exam speed, the TVM keys are more reliable. Same bond: 8% semiannual coupon, 5 years, $1,000 par, 6% yield:
| Step | Keys | Display |
|---|---|---|
| Clear financial registers | f CLEAR FIN | 0.00 |
| Enter N (5 × 2) | 10 n | 10.00 |
| Periodic yield (6 ÷ 2) | 6 ENTER 2 ÷ i | 3.00 |
| Semiannual coupon | 40 PMT | 40.00 |
| Par value | 1000 FV | 1,000.00 |
| Compute price | PV | −1,085.30 |
PV (negative) and press i, then multiply by 2 for the annual figure.Function 6: Depreciation
Keys: cost into PV, salvage into FV, life into n; for declining balance, the factor (%) into i. Key the year number, then f SL (straight-line), f SOYD (sum-of-years’-digits) or f DB (declining balance). The display shows that year’s depreciation; x⇄y shows the remaining depreciable value.
Example, straight-line: same $50,000 asset, $5,000 salvage, 5-year life. Year 1?
| Step | Keys | Display |
|---|---|---|
| Clear registers | f CLEAR REG | 0.00 |
| Cost of asset | 50000 PV | 50,000.00 |
| Salvage value | 5000 FV | 5,000.00 |
| Useful life | 5 n | 5.00 |
| Year 1, straight-line | 1 f SL | DEP = 9,000.00 |
| Remaining depreciable value | x⇄y | RDV = 36,000.00 |
2 f SL for year two, and so on; swap in f SOYD or f DB for the accelerated methods.Function 7: Statistics and Regression
Keys: clear with f CLEAR Σ, accumulate each data point with Σ+, then g x̄ for the mean and g s for the sample standard deviation.
Example: annual returns of 10, 15, 8, 12, 5 (%).
| Step | Keys | Display |
|---|---|---|
| Clear statistics registers | f CLEAR Σ | 0.00 |
| Enter each return | 10 Σ+ 15 Σ+ 8 Σ+ 12 Σ+ 5 Σ+ | 5.00 (count) |
| Mean | g x̄ | 10.00 |
| Sample standard deviation | g s | 3.81 |
Linear regression (beta): accumulate paired data with x-value ENTER y-value Σ+. Then g x̂,r projects a value along the fitted line, and the correlation coefficient r and slope come from the linear-estimation functions; the slope of the market-vs-stock line is the stock’s beta.
Calculator practice is not optional
The calculators aren’t merely permitted; they’re assumed. The exam expects TVM, cash-flow, amortization, bond, depreciation and statistics calculations executed quickly and without error, at every level. Build calculator drills into your preparation from week one: every practice question that requires a calculation is also a calculator drill.
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