The fastest way to do compound interest, loan repayments and investments - central to AI.
In short: The finance solver, also called TVM for time value of money, calculates any one of the loan or savings variables when you enter the others: the number of payments N, interest rate I%, present value PV, payment PMT, future value FV and payments per year. Use it for loans, savings and compound interest questions.
| TI-84 Plus CE | Casio fx-CG50 and fx-CG100 | TI-Nspire CX | |
|---|---|---|---|
| Key sequence | APPS → Finance → 1:TVM Solver. | From the main menu choose Financial → Compound Interest (or TVM). | Calculator page → menu → Finance → Finance Solver. |
Tip: Set P/Y and C/Y to match the compounding (12 for monthly). Leave PMT = 0 for a simple lump-sum investment.
Tip: Set P/Y and C/Y to match the compounding (12 for monthly). Leave PMT = 0 for a simple lump-sum investment.
Tip: Set P/Y and C/Y to match the compounding (12 for monthly). Leave PMT = 0 for a simple lump-sum investment.
Here's a real IB-style question that uses exactly this technique.
$5000 is invested at a nominal annual interest rate of 4%, compounded monthly. Find the value of the investment after 3 years, to 2 decimal places.
The fastest way to do compound interest, loan repayments and investments - central to AI. Compound interest over several years, especially with monthly or quarterly compounding. Finding the monthly repayment on a loan, or how long it takes to pay one off.
1. APPS → Finance → 1:TVM Solver. 2. Enter N (number of payments), I% (annual rate), PV (present value), PMT (payment), FV (future value), and P/Y & C/Y (payments/compounds per year). 3. Use the sign convention: money you pay out is negative, money you receive is positive. 4. Put the cursor on the unknown and solve.
1. From the main menu choose Financial → Compound Interest (or TVM). 2. Enter N (number of payments), I% (annual rate), PV (present value), PMT (payment), FV (future value), and P/Y & C/Y (payments/compounds per year). 3. Use the sign convention: money you pay out is negative, money you receive is positive. 4. Put the cursor on the unknown and solve.
1. Calculator page → menu → Finance → Finance Solver. 2. Enter N (number of payments), I% (annual rate), PV (present value), PMT (payment), FV (future value), and P/Y & C/Y (payments/compounds per year). 3. Use the sign convention: money you pay out is negative, money you receive is positive. 4. Put the cursor on the unknown and solve.
Set P/Y and C/Y to match the compounding (12 for monthly). Leave PMT = 0 for a simple lump-sum investment.
In the worked example on this page (3 marks, Paper 2), the marks are: M1: N = 36, I% = 4, PV = −5000, P/Y = C/Y = 12; A1: FV = $5636.36.
Questions that need this technique link back to this guide. Try one in practice mode, or see every GDC guide.