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"In one of the exercises I would do with students, I'd say, 'Show me that you know how to use the financial calculator and calculate mortgage payments,' " recalls Mr. Cox.
NPV can also be calculated using a financial calculator or a set of NPV tables, which are useful if you don't have a calculator to perform the cash flow discounts.
Calculate the monthly principal and interest payment using a financial calculator, a spreadsheet program such as Excel or Open Office Calc, or an online mortgage calculator.
Use the following formula to calculate the bond price at a discount with a financial calculator, or use an online bond calculator: coupon value x (1-[1/1 + interest ^ number of payments] /interest) + face value /(1 + interest ^ number of payments).
"We didn't even learn how to use a financial calculator.
You could do them with a decent financial calculator, or an Excel spreadsheet.
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And fortunately, with financial calculators and Excel spreadsheets, NPV is now nearly just as easy to calculate.
Many financial calculators also include an NPV function.
Go to www.edmunds.com, click on "financing" and click again on "low APR vs. cash back" under "financial calculators".
In 18 years, the bill for a private college could easily hit $500,000, according to online financial calculators created by Raymond James planners.
"I've been spending time with all those online financial calculators that tell you how much to save for retirement and college," I told him.
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