Financial calculator

Definition

A financial calculator is a specialized tool designed to perform complex financial calculations quickly and accurately. It is commonly used for tasks such as calculating interest rates, loan payments, investment values, and statistical measures.

5 Must Know Facts For Your Next Test

1. A financial calculator can compute standard deviation and variance, which are vital for understanding measures of spread.
2. It enables quick calculation of correlation coefficients, helping in the analysis of relationships between different financial variables.
3. Financial calculators often include functions for regression analysis, allowing users to perform linear regressions directly.
4. They are equipped with time value of money (TVM) functions to solve problems related to present and future value of cash flows.
5. Many models offer programmable features that let users input custom formulas for specific financial analyses.

Review Questions

• What statistical measures related to spread can be calculated using a financial calculator?
• How does a financial calculator assist in performing correlation analysis?
• What are some key functions available on a financial calculator that aid in regression analysis?

Related terms

Standard Deviation:

A measure that indicates the amount of variation or dispersion from the mean in a set of data points.

Correlation Coefficient:

A statistical measure that describes the strength and direction of a relationship between two variables.

Regression Analysis:

A set of statistical methods used for estimating relationships among variables, often used to make predictions.