Scientific Calculator - Analysis and Buying Guide - 2023
Whether you're signing up for a business class, taking a standardized financial certification exam, or calculating loan payments, a financial calculator is a tool you'll need.
A financial calculator can perform simple mathematical calculations just like any handheld calculator. However, you can also calculate things like compound interest payments and rate conversions. It has additional keys to help you do these complex calculations quickly and efficiently.
If you have used a scientific calculator in the past, a financial calculator will be familiar to you. Both types of calculators are handheld devices that fit in the palm of your hand. They have small keys that are marked with the functions they provide. A monochrome screen at the top shows both numbers and letters.
To find the best financial calculator for your situation, it helps to understand the various functions that these units can perform. In this buying guide, we outline some of the key items to consider when buying a financial calculator.
Key Considerations
Here are some high-end items to consider when shopping for a financial calculator.
- Usage Plans
For those who only need a calculator for an entry-level financial class or to calculate simple loan terms, a basic financial calculator works well. These units often offer Time Value of Money (TVM) calculations. However, they do not typically perform Reverse Polish Notation (RPN) calculations.
Finance professionals will need a high-end model capable of complex calculations. Certain finance classes also require a calculator with advanced functionality.
- Limitations of Use
If you plan to use your financial calculator for an advanced college course or a financial certification exam, only certain models will have the capability you require.
For example, with the PPC exam, scientific graphing calculators cannot be used. (These models can often perform financial calculations as well.) Instead, you should use a financial calculator. However, the CFP exam rules do not specify an exact model that must be used.
For college courses or certification exams like the CFA, you often need to use a particular model of financial calculator. Always check with the entity that administers the exam or with the instructor of the course to see if you need an exact model.
Characteristic
The following features help differentiate financial calculators on the market so you can decide which one is right for you.
- Functions
Powerful financial calculators have a large number of built-in functions, perhaps 200 or more. But you will pay a higher price for this style of calculator. Even the basic ones have at least 50 built-in functions.
- Power
Most financial calculators are battery and battery operated, usually round and coin operated. Some also offer a solar power option, using the battery as a backup when light is not available. The ease of replacing a battery varies from one model to another, as does the duration of the battery. Most calculator batteries last from one to five years, depending on the frequency of use.
- Screen
The LCD screen of a financial calculator is not measured in size like, say, a smartphone screen would. Instead, it's measured in the number of characters and lines it can display at once. Having dozens of characters visible simplifies the process of calculating complex equations.
- Storage
Financial calculators have some internal memory storage. This allows you to store data as you enter and use it. It also stores the programming changes you have made to the unit. A calculator with 12 to 20 kilobytes of memory is above average.
- Portability
For those who need to perform financial calculations on the go, a calculator is a smart choice as it fits in the palm of your hand. Some prefer a vertically aligned calculator; others prefer horizontally aligned units.
- Conversion of Currencies and Units
For financial planners who work with multiple currencies, it is important to have a financial calculator that can be adjusted to the current currency. This feature is often limited to expensive models.
- Additional Characteristics
Certain models of financial calculators are capable of setting an alarm, reminding of appointments, and creating reminder lists.
Tips
Some people can get the functionality they need from a basic calculator or spreadsheet. Others will definitely need a financial calculator. Here are some reasons why it might be the last.
To calculate the time value of money equations, you need a financial calculator. Most people who use financial calculators work with these types of equations. All financial calculators can perform this function quickly with a single keystroke, outperforming other options.
To solve future value equations, you need a financial calculator. You can make calculations on how your investments will grow over time based on the different factors you enter into the calculator.
To calculate payment amounts based on compound interest, a financial calculator is needed. As long as you know how often interest on a loan compounds, you can use your financial calculator to calculate upcoming payments in a hurry.