Picturing Financial Problems 55
5
Picturing Financial Problems
How to approach a Financial Problem
The financial vocabulary of the HP 10bII+ is simplified to apply to all financial fields. For
example, your profession may use the term
balance
,
balloon
payment
,
residual
,
maturity
value
, or
remaining
amount
to designate a value that the HP 10bII+ knows as
É
(future
value).
The simplified terminology of the HP 10bII+ is based on cash flow diagrams. Cash flow
diagrams are pictures of financial problems that show cash flows over time. Drawing a cash
flow diagram is the first step to solving a financial problem.
The following cash flow diagram represents investments in a mutual fund. The original
investment was 7,000.00, followed by investments of 5,000.00 and 6,000.00 at the end of
the third and sixth months. At the end of the 11
th
month, 5,000.00 was withdrawn. At the end
of the 16
th
month, 16,567.20 was withdrawn.
Figure 2 Cash flow diagram
Any cash flow example can be represented by a cash flow diagram. As you draw a cash flow
diagram, identify what is known and unknown about the transaction.
Time is represented by a horizontal line divided into regular time periods. Cash flows are
placed on the horizontal line when they occur. Where no arrows are drawn, no cash flows
occur.
Summary of Contents for 10bII+
Page 1: ...i HP 10bII Financial Calculator User s Guide HP Part Number NW239 90001 Edition 1 May 2010 ...
Page 3: ...iii HP 10bII Financial Calculator ...
Page 30: ...At a Glance 22 ...
Page 144: ...Statistical Calculations 136 ...
Page 183: ...Warranty Regulatory and Contact Information 9 ...
Page 184: ...Warranty Regulatory and Contact Information 10 ...