How to use P/Y and C/Y on BA-II Plus Calculator

[@areebasaleem7216]

THIS IS THE BEST THING FOR ME.. Have been banging my head for a week for the right explanation. couldn't grasp any other explanations somehow. Thank you so much!!

[@profjohnk]

I'm happy I was able to break through!

[@maverick210885]

This might sound dumb, but why do we need to calculate effective weekly rate? In what scenarios do we need to calculate such rates?

[@profjohnk]

This is very good and important question. When solving a problem with weekly periods (weekly payments) the discount rate would have to be an effective weekly rate.

[@maverick210885]

@@profjohnk Hello Prof. Thanks for the response. So what I understand is, when there are more compounding intervals than payment interval, then effective interest rate has to be calculated for the payment interval. But when payment intervals are more than compounding intervals, we can just sum up the payments within a compounding interval and then calculate the values. Is my understanding correct? And thanks again for taking time out to reply.

[@profjohnk]

@@maverick210885 No, its simpler than that. Your effective interest rate should always be the same as the payment interval, no matter what your compounding intervals are. Monthly payments = effective monthly rate Daily payments = effective daily rate Annual payments = effective annual rate Payments every 2 years = effective 2 year rate

[@Hkdrawing817]

thank you so much

[@profjohnk]

You're welcome!! I'm glad it helped. If there's anything else you're trying to on your calculator feel free to ask!

[@VodkaSoda]

This video saved my ass for my midterm. Thanks!😁

[@profjohnk]

Yesss!! Glad this was helpful for you

[@davidwayne9864]

I was doing this problem,Given a stated annual interest rate of 6% compounded quarterly, the level amount that, deposited quarterly, will grow to £25,000 at the end of 10 years is closest to: why if i changed the c/y to 4 and p/y to 4 do i need to input 40 for n and not just the ten years. Isnt the point of p/y to do that step for me? thank you

[@profjohnk]

No, the point of PY is just to tell the calculator that your payments are quarterly so that it calculates the effective rate correctly. You ALWAYS need to input N in the correct unit of them because it N is the number of periods, not the number of years. N = years * PY Let me know if that’s clear or if you have any other questions s

[@kartikthefriend]

why N is not 5 if we have already input C/Y 365

[@profjohnk]

N = years x PY

[@m.1082]

thank u ily so much hbb

[@profjohnk]

You're welcome!

[@HarryTandel]

Why i got 114969.25 as final amount?