How to Use a Financial Calculator

A financial calculator is a useful tool that allows users to calculate payments, determine interest rates and to solve for the present or future value of a loan or annuity. There are a variety of financial calculators to choose from, however, they all help you to revitalise your personal finances and figure out a way to get out of debt more quickly while saving money. There are five keys representing the variables used most frequently on a financial calculator: “N”-number of periods, “I”-periodic interest rate, “PV”-present value, “PMT”-payments and “FV”-future value. A financial calculator can help you solve any of these five functions.

You will need

  • Financial calculator or a financial calculator computer program.
  • Loan or investment data.


  1. Determine which variable you want to solve for, keeping in mind that the present value is usually the part of the loan or annuity that you are starting with. Example: if you have a 30 year mortgage on a home, the present value is the amount of the loan; you will need to have four out of the five variables to start, keeping in mind that the PMT, PV, or FV may be zero.
  2. Know when you have to use “zero.” PMT is zero when you either invest a lump sum or owe all of your money at the end of a term; PV is zero when you are receiving or making payments; FV is zero when a loan or annuity is paid off or finished paying out.
  3. Enter known values into your calculator with the keypad and then press the function button that corresponds with that amount. Example: if N should be 360, enter “360” and press the “N” key. The method used to input values may vary between financial calculators.
  4. Solve for the variable you need. Your calculator should have a “Compute” button. Press the “Compute” button and then the function key that you need to solve for. You can tweak the amounts after you have a solution if you decide to change some of the parameters used.
  5. Try to solve the following as a test run; the payment should be 1,199.10.:


5.I= 6%/ 12=0.05%

5.PV= 200,000

5.PMT= Solve

5.FV= 0

5.This would be your payment on a $200,000 home with no down payment on a 30 year mortgage with a 6% interest rate.


  1. Write down all your income and debts before using any financial calculator. This will help you better spend your actual calculating time coming up with solutions rather than scrambling for basic required information.
  2. Do use various computer programs, like Microsoft Excel, or websites if you do not own a financial calculator.
  3. Keep in mind that the number of periods is usually listed in the same increment as the interest rate; a 30 year mortgage, for example, would have 360 periods, or months.