How to Use the BA II Plus Calculator: Complete Guide

The BA II Plus is a good calculator with two bad defaults. Out of the box it shows two decimal places, which hides the digits you need when you are checking a bond price, and it assumes twelve payments a year, which quietly turns a 30-year mortgage into a 30-month one if you type N = 30. Fix those two settings and most of the errors people blame on the hardware disappear.

This guide covers the whole device in the order you actually meet it: the settings, the keyboard layout, the sign convention that trips up everyone once, the five time-value registers, and the nine worksheets hiding behind the number keys. Every sequence below is written exactly as you press it.

The five-minute setup that prevents most wrong answers

Three settings decide whether the calculator agrees with your textbook. Do them once, and check them whenever an answer looks strange.

Show more decimals

The display rounds to two decimals until you tell it otherwise. That is fine for a payment and useless for a bond price quoted to three decimals or an interest rate you are about to feed back into another calculation.

1. 2ND
2. · FORMAT
3. · 9
4. · ENTER
5. · 2ND
6. · QUIT

DEC accepts 0 through 8 for a fixed number of places, and 9 for a floating decimal that shows whatever the answer actually is.

Rounding on screen never changes the stored number — the calculator keeps full internal precision either way. The reason to show nine decimals is so that you can see when a rate is 6.499999 rather than 6.5, which is the difference between a clean answer and a suspicious one.

Match P/Y to the problem

P/Y is payments per year and C/Y is compounding periods per year. Setting P/Y also sets C/Y to the same value, which is what you want the vast majority of the time.

1. 2ND
2. · P/Y
3. · 12
4. · ENTER
5. · ↓
6. · 12
7. · ENTER
8. · 2ND
9. · QUIT

With P/Y = 12 the calculator reads N in months and I/Y as a nominal annual rate that it divides by 12 internally. So a 30-year loan at 6.5% is N = 360 and I/Y = 6.5 — not N = 30, and not I/Y = 0.5417. Type both of those in and the two errors do not cancel.

Some people avoid the problem by leaving P/Y at 1 forever and converting the rate and the number of periods by hand: 360 into N, and 6.5 ÷ 12 = 0.541667 into I/Y. That is exactly as correct, and it is the habit most CFA candidates settle on because there is one fewer setting to get wrong. Either way, pick one and stop switching.

Decide when payments happen

END mode assumes each payment lands at the end of the period, which is right for loans, mortgages and ordinary annuities. BGN mode moves every payment to the start of the period, which is right for rent, leases and annuities due.

1. 2ND
2. · BGN
3. · 2ND
4. · SET
5. · 2ND
6. · QUIT

BGN shows in the top of the display while it is active. If you cannot see it, you are in END mode.

The difference is one period of interest on every payment. Saving £500 a month for 25 years at 8% grows to £475,513.20 in END mode and £478,683.29 in BGN mode — £3,170 for doing nothing except paying on the first of the month instead of the last.

Chn or AOS for plain arithmetic

This one only affects the arithmetic keys, not the worksheets. In Chn (chain) mode the calculator evaluates strictly left to right, so 2 + 3 × 4 gives 20. In AOS mode it respects operator precedence and gives 14. Set it in the same FORMAT menu, two arrow presses past DEC.

AOS matches how formulas are written on paper, so it is the safer default if you type long expressions. Chn matches how most people key numbers when they are working quickly. Neither is wrong; knowing which one you are in is what matters.

How the keyboard is organised

Nearly every key does two things. The white label on the key is its primary function, and the label printed above it is what you get after pressing 2ND.

The five keys along the time-value row — N, I/Y, PV, PMT, FV — are the heart of the machine. Their second functions are the settings and tools that go with them: xP/Y multiplies a number of years by P/Y, P/Y opens the frequency menu, AMORT opens the amortization schedule, BGN switches payment timing, and CLR TVM wipes all five registers.

The number keys carry the worksheets. 2ND plus 1 through 9 and 0 opens DATE, ICONV, PROFIT, DEPR, Δ%, BRKEVN, DATA, STAT, BOND and MEM in that order. Once you are inside one, ↑ and ↓ walk through its variables, ENTER stores a value, CPT computes one, and 2ND QUIT gets you out.

The sign convention, and why it is not optional

The BA II Plus does not know what a loan is. All it knows is that the five registers have to balance:

1. PV + PMT × ä(N,i) + FV × (1+i)^−N = 0

ä is the annuity factor for N periods at rate i. Every TVM answer is this equation rearranged.

For that equation to have a solution, money has to flow in both directions. So the rule is mechanical: cash you receive is positive, cash you pay out is negative.

Borrowing £250,000 means you receive the money now and pay it back later, so PV is +250,000 and PMT comes out negative. Investing £250,000 means you pay it out now and receive it later, so PV is −250,000 and FV comes out positive. The arithmetic is identical; only the direction changes.

Get this wrong and one of two things happens. Either you get a payment with an unexpected sign, which is harmless once you know why, or you get Error 5, which means no rate or number of periods exists that satisfies an equation where all the money flows one way.

Your first calculation: what £5,000 becomes in ten years

Deposit £5,000 today at 6% a year, compounded annually, and leave it alone. Because there is no recurring payment, this is a four-register problem: N, I/Y, PV and FV, with PMT at zero.

1. 2ND
2. · P/Y
3. · 1
4. · ENTER
5. · 2ND
6. · QUIT
7. · 2ND
8. · CLR TVM
9. · 10
10. · N
11. · 6
12. · I/Y
13. · 5000
14. · +|−
15. · PV
16. · 0
17. · PMT
18. · CPT
19. · FV

The display reads 8,954.24. Positive, because you get the money back at the end. The £3,954.24 of growth on £5,000 is compounding doing its work: 6% of the original deposit is £300 a year, and ten years of simple interest would have been £3,000.

Now change one thing without clearing anything. Type 15 and press N, then CPT FV again: 11,982.79. That is the fastest way to answer a “what if” question on this calculator — overwrite one register and recompute. Everything else stays where it was.

A real loan: the payment on £250,000

Now the calculation people actually buy this calculator for. A £250,000 repayment mortgage over 30 years at 6.5% nominal, paid monthly.

1. 2ND
2. · P/Y
3. · 12
4. · ENTER
5. · 2ND
6. · QUIT
7. · 2ND
8. · CLR TVM
9. · 360
10. · N
11. · 6.5
12. · I/Y
13. · 250000
14. · PV
15. · 0
16. · FV
17. · CPT
18. · PMT

The answer is −1,580.17. Negative because it leaves your account. PV stayed positive because the bank handed you the money.

Multiply that by 360 and you have paid £568,861.22 for a £250,000 house — £318,861.22 of it interest, more than the loan itself. That single number is the honest argument for every extra payment anyone has ever made.

Three variations, each one keystroke away from the base case above:

Change	Keys	Payment
Rate rises to 7.5%	7.5 I/Y CPT PMT	£1,748.04
15-year term instead	180 N CPT PMT	£2,177.77
Borrow £200,000	200000 PV CPT PMT	£1,264.14

Shortening the term from 30 years to 15 raises the payment by £597.60 a month and cuts total interest from £318,861.22 to £141,998.31. Halving the term saves more than half the interest, because the balance that interest is charged on falls faster the whole way down.

The worksheets behind 2ND and a number key

The TVM row handles anything with a level payment stream. Everything else lives in a worksheet, and each one is a small form you walk through with the arrow keys.

Keys	Worksheet	What it does
2ND 1	DATE	Days between two dates, or a date a number of days away
2ND 2	ICONV	Nominal rate to effective annual rate and back
2ND 3	PROFIT	Cost, selling price and margin, solving for any one
2ND 4	DEPR	Straight line, sum-of-years’-digits and declining balance
2ND 5	Δ%	Percentage change, and compound growth between two values
2ND 6	BRKEVN	Break-even quantity from fixed cost, variable cost and price
2ND 7	DATA	Enter one or two data lists for the statistics worksheet
2ND 8	STAT	Mean, standard deviation and linear regression on that data
2ND 9	BOND	Clean price, yield to maturity and accrued interest
2ND 0	MEM	The ten storage registers, all visible in one list
2ND PV	AMORT	Balance, principal and interest between any two periods
CF	Cash Flow	Uneven cash flows, feeding the NPV and IRR keys

The Cash Flow worksheet is the one worth learning next, because it is the only way to handle payments that change from period to period. CF takes CF0 and then pairs of amount and frequency, NPV asks for a discount rate and computes, and IRR needs no input at all beyond CPT.

Four different clears, and when to use each

Reaching for the wrong clear is how people lose settings mid-exam.

Keys	Clears	Leaves alone
CE/C	The number you are typing	Every stored value
2ND CLR TVM	N, I/Y, PV, PMT, FV	P/Y, C/Y, BGN/END, display, memories
2ND CLR WORK	The worksheet you are inside	Everything outside it
2ND RESET ENTER	All of it, back to factory	Nothing

2ND CLR TVM between problems is the right habit. It is the only clear that removes a stale FV or PMT without also resetting P/Y to 12 and the display to two decimals — which is exactly what 2ND RESET ENTER will do to you two minutes into a timed exam.

Storing numbers instead of writing them down

There are ten memories, numbered 0 to 9. STO then a digit saves the displayed number; RCL then the same digit brings it back. 2ND MEM shows all ten in one scrollable list.

1. 1580.17
2. · STO
3. · 1
4. · …
5. · RCL
6. · 1

STO overwrites without asking. 2ND MEM then 2ND CLR WORK empties all ten at once.

2ND ANS recalls the last computed result, which is more useful than it sounds: after CPT PMT you can multiply the payment by 360 without retyping it or losing the register. Storing the intermediate value beats writing it down and retyping a rounded version, and it is the single easiest way to stop rounding error creeping into a multi-step answer.

What the error messages mean

Message	Cause	Fix
Error 5	No solution — usually all cash flows share one sign	Make the money you pay out negative
Error 4	A value is outside the range the worksheet allows	Check for a negative N, or a rate below −100%
Error 7	Too many iterations without converging, common in IRR	Re-check the cash flows for a sign pattern with several roots
Error 2	Invalid argument, such as the square root of a negative	Look at the last operation, not the last entry

Error 5 accounts for most of them, and it is nearly always the sign convention. Before you change anything else, ask which direction each amount of money is travelling.

A ten-minute drill

Speed on this calculator comes from a handful of sequences becoming automatic. Run these five until you stop thinking about the keys, then stop.

1. Setup from cold. Floating decimal, P/Y = 12, END mode, clear TVM. Under fifteen seconds.
2. Payment. £250,000, 30 years, 6.5% → −1,580.17.
3. Rate. Pay £18,500 now, receive £30,000 in eight years, P/Y = 1 → CPT I/Y gives 6.2291%.
4. Term. £20,000 at 9% with payments of £450 a month → CPT N gives 54.26 months, so 55 payments with the last one small.
5. Effective rate. 2ND 2, NOM = 6, C/Y = 12, CPT on EFF → 6.1678%.

Those five cover perhaps 70% of what anyone asks a BA II Plus to do. The worksheets are worth learning one at a time, in the order you meet them: TVM, then Cash Flow, then AMORT, then BOND.

Each guide on this site takes one of these further with the full keystroke trail: the time value of money in detail, NPV on the cash flow worksheet, and the shortcuts worth drilling before a CFA exam.