A financial calculator is a type of electronic calculator that performs financial functions. It has standalone keys for many functions, making financial calculations more straightforward. Some of these keys can be found on a business calculator, but a financial calculator is more specialized and is designed to perform financial calculations. These calculators are useful for small businesses and can be used for other business functions as well.
One of the basic functions of a financial calculator is its ability to handle negative numbers. Sometimes, negative numbers are required to determine the down payment on a new car or to determine the depreciation value of an old car. Most calculators will also have a basic set of keys, similar to buttons on other devices. Some of these keys are: I (interest rate), N (number of payments) and PMT (payments).
When using a financial calculator, it is crucial to enter the correct interest rate. This number must match the interest rate charged during the period. This interest rate can be entered directly or using an equal sign. This will ensure that the results are accurate. Once you have entered the right rate, you can choose which payments per period you’d like to use.
While a financial calculator is not a perfect substitute for a professional financial advisor, it can prove useful for a variety of financial planning situations. Its ability to solve basic math functions makes it a valuable tool for finance professionals.