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SLVIT4.TXT
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1990-10-15
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SolveIt!
Version 4.0/4.1
General Features
SolveIt! is a general purpose financial calculator that is
capable of answering many of the questions that you might
have when it comes to money. Its features a VERY EASY to use
user interface that asks a series of questions. You simply
"fill-in-the-blanks" and press <F9> and the program will
calculate the results. There is NEVER any need to do any
programming. And all of the routines are accessed using an
standard menu system.
SolveIt! 4.0 is a MAJOR update. SolveIt! now sports a new,
even easier to use, user interface. The user can more easily
edit any of the inputs. The cursor keys can be used to go
back and correct an entry even before you calculate the
results.
You can press <F1> at any time, and a help window will
appear providing detailed information about the routine and
the question that is being asked. For those who are not
familiar with all of the concepts used in these routines,
reading the help screens will be very educational.
Extensive printing is available in version 4.1. Our routines
are written to work with any printer. In fact, we have NEVER
found a printer that SolveIt! does not support. Schedules
can also be printed to disk so that you may later load them
into your word processor. This will allow you to edit them
or highlight important points.
The professional user will appreciate the way that SolveIt!
saves its data. All data for one client is kept in one file.
This way, information on Mr. Samual's mortgage is available
in the same file as his budget and net worth statements.
There are too many changes to describe in this short flier,
but suffice it to say that every single routine in SolveIt!
has been greatly enhanced since version 3.1. As we developed
SolveIt!, we gave two things over riding concern. First, the
program had to be VERY easy to use. Even though an extensive
manual is supplied, we hope that you never need to use it.
And secondly, the program had to be fast. Therefore, data is
easy to enter quickly and the program will often perform a
calculation instantly.
1
The 30 Routines of SolveIt! 4.0
Future Value
Calculates the future value of a single deposit or series of
deposits. The interest rate may be changed at any time
during the term. The deposits may be made in any amount
either on a regular or irregular basis. The user also speci-
fies a starting date, term, payment period, compounding
period and whether the deposits are in advance or arrears.
In addition to doing a quick future value calculation, this
routine will do a schedule that shows the future value at
the beginning or end of each period, as well as the deposit
amount for the period (if any), the accumulated interest and
the total principal.
Present Value of an Amount
Solves for the present value of a future amount. The routine
prompts for the amount, the number of periods, the compound-
ing frequency and the interest rate.
Present Value of a Series
Solves for the present value of a series of future payments.
The payment amounts can be changed as well as the interest
rate. Besides calculating a quick present value amount, this
routine will also do a schedule that shows the individual
payments, the value of the accumulating payments, the rate,
and the running future and present values of the payments.
Internal Rate of Return (New Routine)
Takes a series of complicated cash flows and answers the
question, "What is the rate of return on this deal?". You
will be prompted to enter the initial investment and then
the projected income from that investment as a series of
positive or negative cash flows. The IRR result will tell
you the return on your investment. Use this figure to com-
pare what you could earn on your money using another invest-
ment.
Net Present Value
Is an investment a good investment? Enter the minimum rate
of return that is acceptable to you or your firm and then
enter the cash flows that the investment will generate. If
the NPV result is positive then the investment is exceeding
your minimum requirement. On the other hand if it is nega-
tive, it is not meeting your expectations.
You may use this routine and the IRR for any investment from
stocks and bonds to a capital investment in a plant.
2
Time To Withdrawal (Annuity Payout)
Answers the question, "How long will an amount last assuming
a regular withdrawal?" The amount withdrawn can be adjusted
by an inflation factor. SolveIt! can calculate the results
using either the Annuity Due or the Annuity in Advance
Method. The user can also specify the payment and compound-
ing periods.
This routine reports not only the length of time that the
funds will last, but also the total amount returned with
interest, the net gain and the date of the last payment.
A schedule can also be calculated. This schedule will show
the payment amount, the interest for the period, the accumu-
lated interest, the remaining balance and the total amount
paid.
Required Payment for a Future Sum
Answers the question, "How much do I have to put away on a
regular basis to reach some amount at a particular point in
the future?" The routine asks the user for the interest
rate, compounding periods, payment periods and the desired
term. Besides calculating the required payment, SolveIt!
also reports the total amount invested, the gain over the
invested amount, the total years invested and how long it
takes money to double at the prescribed scenario.
Purchasing Power
The Purchasing Power Routine looks at the value of money two
ways. It calculates both the declining value and the equiva-
lent value of an amount. The routine allows any amount to be
entered and adjusted by any inflation rate over any period
of time up to a maximum or 40 years. The inflation rate may
be adjusted every year and the context sensitive help screen
includes the percentage of change in the Consumer Price
Index from 1960 through 1989.
The equivalent purchasing power (constant dollars) will tell
you how much money is equal in value to the original amount.
The declining purchasing power tells you what the original
amount is worth in current dollars.
Equivalent Interest Rate
Is it better to invest money at 8.25% compounded quarterly
or 8.12% compounded monthly? This routine will tell you the
equivalent rate to a given rate at a particular compounding
period assuming a different rate of compounding.
3
Interest Rate Earned
If you invested $10,000 in a venture that returned $18,900
after 8.5 years, what was the yield on your original invest-
ment? This routine lets you look at money compounded 8
different ways.
Loan Calculator
You provide the Loan Calculator with three of the four
standard loan variables, amount, term, interest rate or
payment, and SolveIt! will solve for the unknown value. The
routine also considers 8 different compound and payment
periods and whether the payment is made in advance or ar-
rears.
Amortization Table
The Amortization Routine is as powerful as any found in
stand-alone amortization programs. The routine prompts you
for the loan amount, the term, whether the loan is based
upon a 360 or 365 day year, and the interest rate (or
rates). This routine supports 8 different payment and com-
pounding periods which may be set individually. (Choose
from: daily, weekly, biweekly, monthly, bimonthly, quarter-
ly, semiannually or annually.) You also get to select how
the table will be displayed. That is, do you want the totals
displayed based upon a calendar year, fiscal year or loan
year. Finally, you provide the starting date, amortization
method (Normal, Rules-of-78, Interest Only, Fixed Principal,
or U.S. rule) and payment method (Arrears for standard loans
or Advanced for leases).
The resulting schedule will give both totals for the year
displayed and from the origination date of the loan. The
program will accept a change of interest rate (ARM) on any
payment date. You may also skip payments. And you can make
random or regular extra payments to be applied to principal.
By pressing <S>, you will be able to summarize the loan
through any period. That is, you will be shown the total
amount of interest paid, total principal paid, the interest
saved as the result of extra payments and the remaining
balance.
Finally, the Amortization Routine will also handle a loan
that is being negatively amortized (i.e. accrued interest)
over all or part of its term.
4
Balloon Payment
The Balloon Payment will tell you what the periodic payment
will be for a loan when you specify a loan amount, term,
interest rate, payment method and period, compounding peri-
od, balloon payment amount and balloon payment number. This
gives you the power to design a loan to fit your criteria.
Accelerated Payment
While the Amortization Routine will calculate interest saved
for random or regular extra payments of any amount, the
Accelerated Payment Routine will very quickly solve for the
interest saved and calculate the reduced term for a series
of regularly paid extra payments.
Remaining Balance
Calculates the remaining balance of a loan after any pay-
ment. Again, this is a very fast routine to use. You fill-
in-the-blanks, and SolveIt! will instantly calculate the
results. Nothing could be simpler. Loans can be paid using
one of eight different payment periods and the loan may be
compounded in one of eight different ways. Like the other
loan routines, the payments may be paid either in advance or
in arrears.
Interest Due & Calendar Math (New Routine)
The Interest Due Calculator is a new feature with SolveIt!
4.0. Using this routine, you will be able to calculate how
much interest is due for any number of days or between any
two dates. SolveIt! prompts you to enter either a starting
date or ending date or the number of days. You enter any two
of the three values. Then you enter the amount, interest
rate, payment and compounding period. The routine will not
only solve for how much interest is due, it will also tell
the day of the week for the starting and ending dates.
We can not imagine a more flexible interest due calculator
than this one. If you are due interest today on a financial
instrument that you know you had to hold for 45 days, just
enter today's date as the ending date, and 45 days for the
term and SolveIt! will tell you the date that the financial
instrument was purchased on as well as the interest due you.
Since this routine calculates the starting date, you can
compare the calculation with the date you actually bought
the security. This enables you to check to make sure that
the term was actually 45 days and not 46 or 47 days.
This routine supports both long and short periods as defined
by The U.S. Government's Truth-In-Lending Act, Regulation Z,
Appendix J. Therefore it is also a handy routine to use to
calculate how much interest is due on a loan when a loan is
being paid off on other than a payment due date.
5
Gross Profit Margin
If you are a stock and bond trader or in a retail wholesale
business, and you want to see what the gross profit is for a
series of trades or sales, then this routine will handle the
task for you. You enter quantities and cash flows for
amounts spent and received. The program will calculate the
gross profit, total cost and total revenue as well as the
return on investment and gross profit margin.
This routine is particularly handy if you are a trader who
might buy 1,000 units of an item at one price and then sell
the 1,000 units at different prices over many different
transactions. Of course the Gross Profit Margin routine will
allow you to do many different purchases of an item at
different prices as well.
Believe us, as traders, when we tell you that this routine
is by far easier to use than your desk top calculator for
all but the very simplest sales transactions.
Weighted Average and Analysis
This routine will take the values from the Gross Profit
Margin routine and do some basic analysis on the numbers
such as weighted averages, minimum and maximum values on
both the costs and the revenue. You are also given the
opportunity to key in a new set of values or to edit the
existing values.
Break Even Analysis
In a matter of seconds you will be able to determine not
only the break even point for any business or department but
also the gross sales needed to achieve break even. Gross
sales at break even is an important concept. For often a new
business person will achieve a large cash flow, but he will
not be aware of future payables and therefore redirect cash
flow out of the business.
By using this routine, you can determine not only the number
of units that need to be sold or the number of hours billed
to break even but also what level of gross sales you need to
have to be at break even. Sometimes it is more difficult to
track inventory or hours billed, than it is to track the
gross income of a business. By using this routine and know-
ing your gross sales, you will be able to calculate whether
you are below, at, or above break even.
This routine prompts you for a series of fixed costs, vari-
able costs and if applicable for a series of costs associat-
ed with the product or products sold. In addition to a break
even figure and gross sales at break even, fixed, variable
and material costs are reported as a percentage of sales.
6
Economic Ordering Quantity (EOQ)
If you buy large quantities of an item, this routine will
tell you the most economical quantity to buy considering
your overhead costs and the time value of money. Use this
routine to do a quick check to see if you are over or under
ordering. Remember, inventory costs can kill.
Affordable House
If you use this routine you will very quickly know how much
you can afford to spend on a home given your life style. The
routine asks you for your gross annual income, the cash you
have available for a down payment, the term of the mortgage,
the interest rate plus the estimated taxes, insurance, and
maintenance. Finally, you are asked what percentage of your
gross income you want to devote toward housing. SolveIt!
calculates the total price of a home that you can afford,
the amount of financing needed and what percentage the cash
available is of the total house price so you can see if the
terms for the downpayment of the lending institution are
met.
Second Mortgage Calculator
Often, when one property is being sold and a second property
is being bought, a short term bridge loan is needed since
the proceeds from the first sale are not available when it
is time to close on the second property. This routine will
calculate the first and second mortgage payment. It is
assumed that the second mortgage is only a short term loan
on which only interest is being paid.
Rental Income Analysis
This routine will do a very complete analysis of income
derived from rental units. It looks at variables such as the
purchase price of the property, your tax bracket, monthly
expenses, percentage occupied and property tax to name a
few. SolveIt! allows you to assume different inflation rates
for maintenance, rent and property tax increases. The rou-
tine will calculate mortgage costs using one of three meth-
ods for one or two mortgages. Depreciation, business use
percentage and useful life are also considered. The bottom
line result will be the profitability of the property.
A cash flow schedule is also generated by the program show-
ing the cash flow before and after tax considerations.
7
Budget
The budget routine will now allow you to work with both
protected and actual income and expenses. You can work with
up to six different categories of income and thirty one
categories of expenses. The description for each income and
expense may be change by the user so that the budget may be
set up for an individual, a small business or a department
in a large corporation.
The routine tracks income and expenses over any twelve month
period and generates several cash flow reports. Totals for
all items are reported on a twelve month basis as well. A
report comparing Actual figures as a percentage of the
projected figures is generated without any rekeying of data.
Net Worth
This routine will calculate an individuals net worth. Often,
a borrower will have to present a net worth statement to a
bank when seeking a loan. This routine will perform such a
calculation in a matter of seconds. Just spend a few minutes
filling in the values that SolveIt! is asking for such as
the value of your car, cash in the bank, credit card balanc-
es, etc. And it will tell you your net worth as fast as you
can press the <F9> key.
MACRS Depreciation
The routine displays a depreciation schedule using the
method as defined by the 1986 tax law. All data from the
IRS's tables are include in the program so there is no need
to use the government's tables. And in fact, if you have
questions about depreciation, the help screens are a handy
reference tool for they quote liberally from IRS Publication
534. SolveIt! supports all conventions and both the Acceler-
ated Method as well as the Alternate Straight Line method of
depreciation.
ACRS Depreciation (New Routine)
If you have an asset placed into service before 1987, then
you probably need to depreciate the asset using this method
as defined by the federal government.
Other Depreciation Routines
SolveIt! also supports three other generally used methods of
depreciation. They are the Straight Line Method, the Sum-of-
Years-Digits Method and the Declining Balance Method.
8
