The very useful Finance Solver can be used for various compound interest problems. Below is an explanation of the fields:

1. To access it, press , select Finance > Finance Solver.

   

2. N: Total Number of compounding periods (years × compounding periods per year).
3. I(%): Interest rate (in percentage, so entering 5 means “5%”).
4. PV: Present Value (the value at the start of the loan).
5. PmT: Payment at each period.
6. FV: Final Value (the value at the end).
7. PpY: Payments per Year.
8. CpY: Compounding periods per Year.
9. PmTAt: To set Payments due At the beginning or the end of each period.

Suppose you want to buy a car that costs $9,000. You can afford payments of $250 at the end of each month for four years. The bank offers an interest rate of 5%, compounded monthly. Can you afford it?

1. Press , select Finance > Finance Solver, and fill the app as follows:

   

   • PV is positive because the car counts as cash inflow.
   • FV is zero because we want to pay for the whole cost of the car at the end.
2. Review and confirm the entered values.

   

3. Select the value you want to know (here: PmT), and press . The following result will be displayed:

   

The rectangle indicates the value solved. Thus, you can afford the car since you would have to pay about $207.25 (displayed as a negative number since it’s an outflow of cash) per month, which is less than $250.