TI BAII Plus Calculator Basics for the CFA Exam

Mastering the basics of your CFA calculator is a critical step in your CFA^® exam prep. While the exam allows two models, the Texas Instruments BA II Plus (including the Professional version) is the most popular choice due to its user-friendly interface.

In this guide, based on instructions from CFA expert Jim Maher, we will walk through the essential setups and functions you need to know for exam day.

• Setting Up Your CFA Calculator

• Memory Functions

• Nominal and Effective Interest Rates

• Time Value of Money (TVM)

• Mortgages

Starting and Setting Up Your CFA Calculator

Before you start solving complex TVM problems, you must ensure your calculator is set up properly. The CFA Institute only permits the TI BA II Plus and the HP 12C. We highly recommend the TI BA II Plus Professional for its additional functionality and ease of use.

Changing the Decimal Places (01:11)

By default, the calculator often shows only two decimal places, however, many candidates prefer four or more decimal places.

• How to change it: Press [2nd] → [FORMAT] (the decimal point key).

• You will see DEC = 2.00. Enter 9 (for floating decimals) or 4 and press [ENTER].

Setting the Calculation Mode: CHN vs. AOS (02:18)

The calculator has two modes for processing math:

1. Chain (CHN): Processes calculations in the order they are entered (2 + 2 × 2 = 8).

2. Algebraic Operating System (AOS): Follows standard mathematical order of operations (2 + 2 × 2 = 6).

• How to change it: Press [2nd] → [FORMAT]. Scroll down using the arrow keys until you see CHN. Press [2nd] → [SET] (the ENTER key) to toggle it to AOS.

Setting Periods per Year (P/Y) (05:12)

The calculator defaults to 12 periods per year (monthly). However, in the CFA curriculum, it is much safer to set this to 1 and manually adjust your N and I/Y values.

• How to change it: Press [2nd] → [P/Y]. If it is not 1, press 1 → [ENTER].

Setting the Date Format (06:31)

While not used for basic TVM, the date format is critical if you use the BOND function.

• How to change it: Press [2nd] → [FORMAT]. Scroll down until you see US 12-31-1990.

• International tip: If you prefer the European day-month-year format, press [2nd] → [SET] to toggle to EUR 31-12-1990.

CFA Calculator Memory Functions

The BA II Plus allows you to store up to 10 items in memory locations (0–9). This is vital for multi-step problems where you do not want to write down and re-enter long decimals.

• To Store (00:22): With the number on your screen, press [STO] followed by a digit [0-9].

• To Recall (00:44): Press [RCL] followed by the corresponding digit [0-9].

• To Review Memory (01:33): Press [2nd] → [MEM] to scroll through all stored values.

• To Clear Memory (02:17): To wipe all locations at once, press [2nd] → [MEM] → [2nd] → [CLR WORK].

Warning: Resetting your calculator ([2nd] [RESET]) will clear all memory and revert your settings (Decimals and AOS) to factory defaults.

CFA Expert Tip: Reviewing Your Memory

Instead of recalling numbers one by one, you can audit your stored values.

To review your CFA calculator memory: Press [2nd] → [MEM] (above the 0 key). Use the up and down arrows to scroll through all 10 memory slots. This ensures you have not accidentally overwritten a specific value you need for a multi-step problem.

Nominal and Effective Interest Rates

Understanding the difference between a Nominal Rate (stated APR) and the Effective Annual Rate (EAR) is a core concept.

Using the Interest Conversion (ICONV) Feature (00:46)

Suppose you have a 12% nominal rate compounded semi-annually.

1. Press [2nd] → [ICONV] (above the 2 key).

2. NOM: Enter 12 and press [ENTER].

3. Scroll up to C/Y: Enter 2 (for semi-annual) and press [ENTER].

4. Scroll to EFF: Press [CPT] (Compute).

• Result: 12.36%.

Exam Application: BEY and EAY 

In the CFA curriculum, you may need to convert between Bond Equivalent Yield (BEY) and Effective Annual Yield (EAY). The  [ICONV] function is your primary tool for these types of questions. Using this built-in function is much faster and less prone to entry errors than manually using the EAR formula.

Calculating Time Value of Money (TVM) on CFA Exams

The "Big Five" keys are located in the third row of your calculator:

• N: Number of periods

• I/Y: Interest rate per period

• PV: Present Value

• PMT: Periodic Payment

• FV: Future Value

Crucial TVM Rules (02:41)

1. Clear your work: Before every new problem, press [2nd] → [CLR TVM]. Failure to do this will result in "ghost" data from previous problems ruining your answer.

2. The Sign Convention: The calculator views money as cash flows. For example, if you receive a payment (inflow), it's positive. If you make a payment (outflow), it must be entered as a negative number using the [+/-] key.

Annuity Due (BGN Mode) (11:37)

By default, the calculator assumes payments occur at the end of the period (Ordinary Annuity). If a problem states payments occur at the beginning of the period (Annuity Due):

• Press [2nd] → [BGN].

• Press [2nd] → [SET]. You will see BGN appear in the top right of the screen.

TI BA II Plus Professional Only: Net Future Value (NFV) 

If you are using the Professional model, you have access to the NFV function within the cash flow worksheet.

To find the NFV function on your CFA calculator after entering uneven cash flows in [CF] and calculating [NPV], scroll down one more time past the NPV result. You will see NFV. Press [CPT] to find the future value of those specific uneven flows.

Calculating Mortgages on CFA Exams

Mortgage problems are a common application of TVM. They typically involve finding a monthly payment and determining the remaining principal (payoff amount).

Example: What is the monthly payment on a $100,000, 30-year loan at 6% interest?

1. N: 30 × 12 = 360

2. I/Y: 6 / 12 = 0.5

3. PV: 100,000

4. FV: 0

5. Compute PMT: Press [CPT] → [PMT]. Result: -599.55.

Finding the Remaining Principal (01:30)

To find the payoff amount after the 85th payment, you can use the AMORT function:

1. Press [2nd] → [AMORT] (above the PV key)

2. P1: Enter 85 → [ENTER]

3. P2: Enter 85 → [ENTER]

4. Scroll down to BAL: The balance is $89,488.

Jim Maher’s "Method A" Shortcut (Fastest for Exams)

If the exam asks for a remaining balance and you are short on time, do not use the AMORT functions. Use the N shortcut:

1. Keep I/Y, PMT, and FV the same from your initial calculation.

2. Change N to the number of payments remaining (e.g., if it's a 360-month loan and you have made 85 payments, enter 360 - 85 = 275 for N).

3. Press [CPT] → [PV].

• This will give you the payoff amount (remaining principal) without navigating extra menus.

Final CFA Exam Day Calculator Checklist

• Float the decimals: Set your decimals to 9. The calculator will show as many decimals as necessary (up to 9) without filling your screen with useless zeros.

• BGN danger: If you switch to BGN mode for an Annuity Due problem, switch it back to END immediately after. Leaving it in BGN mode is a common reason for arriving at incorrect answers.

• Resetting the calculator: Remember [2nd] → [RESET] → [ENTER] wipes all the calculator’s settings. If you do this during the exam (not recommended), you must manually go back and change your calculator to AOS and fix your decimal places.

This guide was compiled using the CFA Video Library series hosted by Jim Maher. For more advanced functions like NPV and IRR, check out our Advanced TI BAII Plus Calculator Tips article.