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 Peer Review: Calculator Tutorials for Time Value of Money Concepts
Peer Review
Calculator Tutorials for Time Value of Money Concepts
 Reviewed:
 Jul 2, 2002 by Business
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Overall Rating:
0.0 stars
Content Quality:
0.0 stars
Effectiveness:
0.0 stars
Ease of Use:
0.0 stars
 Overview:
 The tutorial provides the student with instructions on how to use a calculator
to make time value of money calculations necessary for a course in finance or
accounting. The tutorial is linked from the home page for Dr. Mayes? courses in
finance at Clemson University (http://clem.mscd.edu/~mayest). The ?Calculator
Tutorials Index? page provides the written description of how to calculate time
value of money concepts such as lump sums, annuities, uneven cash flows, net
present values (NPV), and internal rate of returns (IRR) for the following
HewlettPackard (HP) and Texas Instruments (TI) calculators: HP10B (no longer
available), HP17BII ($90), HP12C ($69), TIBAII Plus ($30), TI83 ($90) and TI83
Plus ($100). A picture of the face of each calculator is displayed. Text for
all six calculators is essentially the same, with adjustments made depending on
the type of calculator being illustrated. Instructions for setting up each
financial calculator are provided. In addition, the ?cash flow sign convention?
incorporated into financial calculators is explained. The following review is
based on testing the module using a TIBAII Plus calculator.  Type of Material:
 Tutorial
 Technical Requirements:
 The home page requires a Netscape 2.0+ browser or an Explorer 3.0+ browser.
 Identify Major Learning Goals:
 To be able to effectively use a financial calculator in to solve time value of
money problems (future value of a lump sum, present value of an annuity, uneven
cash flows, net present value and internal rate of return).  Target Student Population:
 Undergraduate students who are taking courses in financial accounting,
investments, financial models, or portfolio management.  Prerequisite Knowledge or Skills:
 An understanding of the nomenclature (terms) associated with time value of money
concepts as well as having one of the calculators for which a tutorial is
intended.
Content Quality
 Rating:

 Strengths:
 The primary focus of this module is teaching students how to use a financial
calculator to solve time value of money problems, rather than time value of
money concepts. The module can serve as both a tutorial and reference piece for
faculty who require students to use a financial calculator for solving time
value of money problems. A sample problem is provided for each situation along
with the solution so students will know whether or not they are using their
calculators correctly. The explanation to how to change the default settings
on the calculators was very good. This is one of the first things that students
neglect to change on their calculators. Usually this information is hidden in
the manual that accompanies the calculator. Additionally, the module could be
used as a starting point for instructors who wish to develop a similar handout
for another type of financial calculator.T  Concerns:
 The explanations of the calculations need to be expanded for the site to be
useful. For example, with the BAII Plus Tutorial, the first calculation
indicates that a negative 100 should be keyed into the calculator. But, it is
only later in the tutorial that it is explained that using the minus key will
not work in that context. Instead, it is necessary to use the +/ key. The
tutorial provides fairly accurate information through examples #1 and #2 with
the exception noted above. The instructions for example #3 on uneven cash flows
are incomplete and confusing and did not yield the answer provided. Similarly
the instructions for example #4 on net present value did not yield the solution
provided, however, the internal rate of return computation for this example did
work. It is recommended that the tutorial be expanded so that the exact key
input is shown rather than the more narrative approach that is taken in the
tutorial.
While the purpose of this module is to provide instruction on how to use a
financial calculator, users should realize that the single problem provided for
each time value of money concept is probably not sufficient to guarantee
students learning. Practice solving additional problems would be required.
Were the content of the tutorials accurate, they would be of more value.
Instructors are strongly encouraged to verify that instructions for the other
calculators are accurate and understandable before using with classes.
The HP10B calculator appears to no longer be available having been replaced with
the HP10BII. Furthermore, the location of the keys is different on the HP10BII
calculator
Potential Effectiveness as a Teaching Tool
 Rating:

 Strengths:
 It is a very good idea to set up a tutorial based on specific calculators and
time value concepts. There is a need for such a tutorial as undergraduates have
great difficulty in successfully using their calculators to make these
computations. Although these calculators come with their own manual, many
students are still lost. For this reason, there needs to be a ?how to? resource
on a variety of calculators. So, the basic idea is a very good one. Module
has potential for instructors who require a financial calculator for their
course to give students more options as to the type of and cost of a calculator
they might wish to purchase. To learn how to use a particular calculator,
students need only print the instructions for the calculator they own, all
examples provided are the same.  Concerns:
 The tutorial begins with a lump sum analysis. Thus, it begins with the easy
part of the learning progression, as it should. Unfortunately, the difficulty
in making the lump sum calculations (see above comment) does not contribute to
a learning progression from easy to difficult. A more stepbystep approach
should be adopted in the tutorial. Each button to be keyed needs to be clearly
identified with each step in the process. The typical manual accompanying the
calculators takes a more stepbystep approach, but these instructions are not
adequate by themselves. The tutorials are ?tothepoint? and ontarget with the
topic (unlike the manuals) but the manual?s stepbystep methodology should
have been a consideration in developing this tutorial.
Instructors should plan to use the module in conjunction with additional
assignments. The single example provided for each time value of money concept is
not sufficient drill and practice to ensure students will be able to
demonstrate their ability to solve problems of this nature. The goal should be
for students to be able to solve time value of money problems using a financial
calculator without having to refer back to the tutorial.
Ease of Use for Both Students and Faculty
 Rating:

 Strengths:
 The tutorial is easy to use as it is a reading assignment. A graphic of each
calculator being illustrated is included. Currently, numerous interactive
timevalue calculators are available on the Web that allow users to make these
computations, however, the calculations are not directly tied to using a
financial calculator. For this reason, the tutorial is a good idea. The
module could serve as a guide, if modified, for others to follow when developing
similar materials.  Concerns:
 The module largely appears to be a classroom handout that has been put on the
Web. It appears to be have written in a word processor as the font is times
roman and does not match the font used on the professor?s home page?which has
more of a ?Web? look and feel. The site would be better if it were interactive
in a way that showed which buttons were being pushed on the calculators (lit up,
for example) along with numerically changing the numbers in the calculator
window to correspond with the pushing of the button. Another alternative might
be to use a twocolumn table to display the keystrokes required for a
particular segment of each computation followed by results that would be
displayed on the calculator.
Using the TIBAII Plus calculator several errors were noted. Example #2 has
omitted one keystroke, while examples 3 and 4 leave much to be desired. In the
last sentence of example #2,the CPT key should be pressed followed by the FV key
for the computation to work properly. Pressing the CPT key has been omitted
from the instructions. Instructions provided for examples #3 and #4 appear to
be incomplete and inaccurate and as a result make use of the module without
modification troublesome. For example, the down arrow key should be pressed
twice instead of once after entering data for the first cash flow and
corresponding number of years before entering the next value for the second cash
flow.
Having key terms highlighted with a popup definition or link to a glossary
would be helpful.