How to use a financial calculator

The financial calculator is one of the most convenient inventions of all time for those working in finance. It is an amazing device that simplifies complex calculations and saves a lot of time. But, doesn’t a regular calculator provide quick calculations as well? Why does one need a specific financial calculator?

financial calculator

Of course, a regular or standard calculator calculates equations, but the type of calculation is different. There are many other differences as well, but this is the fundamental point. Standard calculators are ideal for mathematicians who want to breakdown sine, cos, etc. A financial calculator has the functionality to determine depreciation, bond yields, and other aspects that regular calculators cannot help with. This is why those working in the finance and business sectors need these specialized calculators.

The functionality difference also affects the way you use a financial calculator. If you have never used it before, you are bound to be confused by the many new buttons and modes. In this article, our focus is going to be on the fundamentals of using a financial calculator so that you get started with the utmost ease.

The big 5 – the most important keys

Before you even look at your financial calculator, you should learn about its 5 most important keys. They are as follows:

  1. N: The N key represents the number of periods. If you are calculating payments to be made in installments, you can enter the number of months or duration (periods) and then press the N key.
  2. I: The I key calculates the Interest Rate per Period. You will use this button along with other buttons such as N. Different calculators represent this button in different ways. Other representations are I/Y and I%.
  3. PV: PV stands for Present Value. Enter the present value of an investment and then press this button. You will use this button along with the two aforementioned buttons and PMT, in most cases.
  4. PMT: PMT or the Payment button is super simple! It helps you calculate the payments per period.
  5. FV: FV is a sibling to PV. Using the FV button, you log in the future value of a particular investment. You may use it separately or in conjugation with PV to determine the future value based on the present value.

You will notice that most of these buttons will be used together. So, make sure you understand their importance before calculating. Along with these, there’s another button called the CPT or Compute button. This one is self-explanatory. You use it when you want to compute. Press it first and then start using the above buttons based on your requirements.

Understanding how to use different financial calculators

Even after you grasp the basics and learn how to use the fundamental buttons, you may face a problem when you actually start using your financial calculator. This is because, like many other things, there are multiple types of calculators. Some of you may prefer physical devices, while others love using mobile/desktop apps. Even within each, the method of use may vary.

For example, with a particular calculator, you may not be able to calculate properly. Following the same procedure on another calculator may yield results! Don’t worry. You are doing nothing wrong! It is just that some calculators require you to enter certain values as negatives. This is usually the case with physical devices. So, we urge you to go through the user manual that the calculator comes with to avoid this confusion.

Calculating the loan payments

To further help you understand how to use a financial calculator, we would like to give you an example. Since loan payments are the most common calculations, let’s see how to do them:

  1. Learn the payment schedule, term of the loan, the interest rate, and the loan amount.
  2. First, enter the loan amount and press the PV button.
  3. Now, enter the interest rate. Press the I button after this.
  4. The next step is to enter the N value or the number of payments. Press the respective button one you are done.
  5. Press the compute button and then the payment button to calculate the loan payment.

The process is more or less the same for all calculations. The only thing to remember is that you need all the required values at hand. If you don’t have them, calculate them quickly, and then go ahead.

Pro tip: Always check your calculations at least once before you punch them in. A small mistake can create an unspeakable hassle. When this happens, the whole point of using a financial calculator is lost. Be safe and double-check, always!

BONUS: Top uses of a financial calculator

There’s more to financial calculators than just loan calculations, even though that remains a major part of it. Here’s what else you can do:

  1. Basic equations and storage
  2. Depreciating value
  3. Time value of money
  4. Interest rate

As you can see, these are calculations that you cannot do in a standard calculator. If you try, it will take you much longer, and the values won’t really be trustworthy. So, why not rely on a good financial calculator instead?


Financial calculators are very handy and quite easy to use, provided you get the basics right. You may need some time to master the usage, but that’s true for most things. Once you get the hang of it, it will become your best friend.

We hope our article helped you understand the basics. If you have any doubts or questions, please feel free to reach out. We are always happy to help!

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