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BA II Plus: Annuity Payment Step by Step
Calculate annuity payments on the BA II Plus for loans, savings plans, and CFA TVM questions.
TL;DR
Annuity payment problems compute PMT after entering N, I/Y, PV, and FV. Use END mode for ordinary annuities unless the question says payments occur at the beginning.
Formula Reference
Ordinary annuity payment
PMT = PV x r / [1 - (1 + r)^(-n)]Payments occur at the end of each period.
BA II Plus Keystrokes
- 2nd CLR TVM
- Confirm END mode unless annuity due is specified
- Enter N
- Enter I/Y
- Enter PV
- Enter FV
- Press CPT PMT
Worked Example
- Problem: Borrow $20,000 for 5 years at 6 percent with annual payments and zero remaining balance.
- Keystrokes: 2nd CLR TVM; 5 N; 6 I/Y; 20000 PV; 0 FV; CPT PMT.
- Result: PMT is about -$4,747.93.
Common Mistakes
- Using BGN mode for an ordinary annuity.
- Forgetting to set FV to 0 for a fully amortizing loan.
- Ignoring payment frequency.
Related Guides
- Time Value of Money Calculations on the BA II Plus - CFA Level I TVM reference for present value, future value, annuities, perpetuities, and BA II Plus inputs.
- BA II Plus: Annuity Due Step by Step - Set BGN mode and calculate annuity-due values on the BA II Plus.
- BA II Plus: Amortization Schedule Step by Step - Use the BA II Plus amortization worksheet to split loan payments into interest and principal.