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Up103
Hi
I’m studying for L1 in June and have the below questionsHow do you calculate this on the BAII plus calculator. 2(1+g)^5=3. I.e. 2 by 1 plus g to the power of 5 is 3 – calculate g?
Also say if you have a bond that pays $100 pa for 20 years and the discount rate is 10% is there a fast way to calculate the PV? Or do you actually have to do the calculation out manually or would those type of questions be unlike to appear in the exam?
Thanks very much
Eoghan
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Up7
No drama – I’ve worked it out!
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Up4
Thanks Artyeasel – much appreciated!
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Up2
For 2(1+g)^5=3, I would deduce using algebra, i.e. g = 1-(3/2)^(1/5)
So my keypresses would be [1.5] [Yx] [.2] [=] [1] [-] [Ans] [=] yielding 1.08.For the 20 year bond: yes, these questions crop up all the time, and there is a fast way to calculate it. There is already a great example in the BA II Plus guide book that you can get from 300 Hours. I’ll share a screenshot here (@christine let me know if this isn’t cool), but I’d recommend getting it as it probably can help you a lot more: http://www.300hours.com/ba-ii-plus-guide/#.WLfa_RKLTOQ
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Up2
Sorry in terms of the bond question how would you solve for r the following on the calculator
98 = 10/(1+r) + 10/(1+r)^2 + 110/(1+r)^3
I cant see it in the BA11 manual however it is coming up a lot in my current readings
thanks!
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