Whether you're an accountant or simply want to get ahead of your finances, financial calculators are helpful tools that would help you manage your money. Check out the best financial calculators online or read more about these amazing devices below.


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How to Use a Financial Calculator

For modern day accountants, brokers or anybody with a background in finance, a financial calculator is a helpful tool that would go a long way. There are a lot of ways you can use a finance calculator other than adding, subtracting, and dividing. You can calculate investment, interest rates or time periods in which are not provided in interest tables. It is a useful tool that provides you with concrete numbers that could be valuable in your wealth management.

What is a Financial Calculator

A financial calculator is a type of calculator that helps business professionals with stand-alone keys and functions that would provide direct numbers that you need. Like a set of standard calculators, financial calculators are also programmable, in order to adapt to functions unique only to the user. If you want to be ahead of your finances, a financial calculator would be an efficient device that you should always have.

Basic Financial Calculator Keys

While some financial calculators may be different in terms of sophistication and calculating power, their purpose is basically the same. What makes financial calculators unique is their special set of keys that would help you out. Found in the first or second row of your financial calculator, these set of keys are used in almost financial formulas that you would ever encounter.

  • N - number of payments
  • I - interest rates or yield. Some calculators indicate I/YR or i
  • PMT - payment
  • PV - present value or loan amount
  • FV - future value

A lot of experts recommend the HP 12-C, HP 10-B, and the TI BA II when it comes to financial calculators. The most popular financial calculator is the HP 10-B which is widely used in many business schools as well as in the finance industry. It's older brother, the HP 10-BII+ has more advanced functions such as probability distribution. Another from Hewlett-Packard or HP is the HP-12C. Though not as popular as the 10-B in business schools, the 12-C is mostly used by seasoned veterans in the financial world. If you are a business and finance major or a professional, a good financial calculator can go a long way.

What can you do with a Financial Calculator?

Aside from doing basic math, financial calculators can solve a lot of equations related to finance such as your cash flow, leverage ratio, your gains and losses, and so much more. Here are some basic finance formulas that you can do with a financial calculator:

Cash Flow

Calculating for your cash flow is simple. What you need to do is take your income and subtract that with your expenses; the result is your cash flow. In fact, to calculate this, you don't even need a financial calculator, just add and subtract your income and expenses.

Leverage Ratio using income

Another simple financial formula that you can do on a basic and a financial calculator is calculating the leverage ratio using income. "Leverage" or borrowed capital is like debt that you can buy things with like a house. Good leverage should be proportioned with your income, otherwise, you would get in trouble. To calculate your leverage ratio, you take your debt payments divided by your income.

Calculating Gains and Losses

For individuals who invested in blue-chip stocks, you can calculate how much you will gain and loss in your investment. To do so, you take your stock's market price, deduct that to its purchase price then divide it by its purchase price again. To calculate your loss, deduct the market price from the purchase price then divide that by the purchase price.

If in case you need a tool that can do more than just add and subtract, grab a financial calculator.