Sharp EL-738 Financial Calculator
Comprehensive Guide to the Sharp EL-738 Financial Calculator
The Sharp EL-738 is a professional-grade financial calculator designed for business professionals, students, and investors. This powerful tool combines advanced financial functions with user-friendly operation, making it ideal for complex calculations in finance, accounting, and economics.
Key Features of the Sharp EL-738
- Time Value of Money (TVM) Calculations: Compute present value, future value, payments, interest rates, and number of periods
- Cash Flow Analysis: NPV (Net Present Value) and IRR (Internal Rate of Return) calculations with up to 24 uneven cash flows
- Amortization Schedules: Generate complete payment schedules for loans and investments
- Cost-Sell-Margin Calculations: Essential for retail and business applications
- Statistical Functions: Mean, standard deviation, and linear regression
- Depreciation Calculations: Straight-line, declining balance, and sum-of-years digits methods
- Bond Calculations: Price, yield to maturity, and accrued interest
- Break-Even Analysis: Calculate break-even points for business decisions
How the Sharp EL-738 Compares to Other Financial Calculators
| Feature | Sharp EL-738 | HP 12C | Texas Instruments BA II Plus |
|---|---|---|---|
| TVM Calculations | Yes | Yes | Yes |
| Cash Flow Analysis (NPV/IRR) | 24 cash flows | 20 cash flows | 24 cash flows |
| Amortization | Full schedules | Basic | Full schedules |
| Cost-Sell-Margin | Yes | No | No |
| Depreciation Methods | 4 methods | 2 methods | 2 methods |
| Bond Calculations | Yes | Yes | Yes |
| Statistical Functions | Advanced | Basic | Basic |
| Display Type | 2-line LCD | 1-line LCD | 1-line LCD |
| Price Range | $30-$50 | $50-$70 | $30-$45 |
Practical Applications of the Sharp EL-738
1. Investment Planning
The EL-738 excels at calculating future values of investments with different compounding periods. For example, you can compare:
- Annual vs. monthly compounding
- Different interest rates over various time periods
- The impact of regular contributions on investment growth
2. Loan Analysis
For personal or business loans, the calculator can:
- Determine monthly payments based on loan amount, interest rate, and term
- Create complete amortization schedules showing principal and interest breakdowns
- Calculate the impact of extra payments on loan duration and total interest
3. Business Financial Analysis
Business owners and managers can use the EL-738 for:
- Break-even analysis to determine minimum sales needed to cover costs
- Profit margin calculations to set appropriate pricing
- Depreciation schedules for asset management and tax planning
- Cash flow analysis for investment decisions
4. Real Estate Investments
Real estate professionals can utilize the calculator for:
- Mortgage payment calculations
- Rental property cash flow analysis
- Return on investment (ROI) calculations
- Comparison of different financing options
Advanced Functions and Techniques
1. Uneven Cash Flow Analysis
The EL-738 can handle up to 24 uneven cash flows, making it ideal for:
- Evaluating investment projects with varying returns
- Analyzing business ventures with irregular income streams
- Calculating NPV and IRR for complex financial scenarios
Example: Suppose you’re evaluating a business investment with the following cash flows:
– Initial investment: -$10,000
– Year 1: $3,000
– Year 2: $4,200
– Year 3: $3,800
– Year 4: $2,500
– Year 5: $1,500
With a discount rate of 10%, the calculator can determine the NPV and IRR of this investment.
2. Bond Valuation
The bond functions allow you to calculate:
- Bond price given yield to maturity
- Yield to maturity given bond price
- Accrued interest between coupon dates
- Duration and convexity measurements
3. Statistical Analysis
For data analysis, the EL-738 offers:
- Mean, standard deviation, and variance calculations
- Linear regression for trend analysis
- Correlation coefficients
- Forecasting based on historical data
Learning Resources and Certification
To master the Sharp EL-738, consider these resources:
- Official Manual: The comprehensive user guide that comes with the calculator covers all functions with examples
- Online Tutorials: Many financial websites offer video tutorials and practice problems
- Finance Courses: Most business and finance courses include calculator training as part of their curriculum
- Professional Certifications: The EL-738 is approved for use in many professional exams including:
- CFA (Chartered Financial Analyst)
- CFP (Certified Financial Planner)
- Series 7 and other FINRA exams
- Real estate licensing exams
Maintenance and Care
To ensure your Sharp EL-738 remains in optimal condition:
- Store in a protective case when not in use
- Avoid exposure to extreme temperatures or moisture
- Clean the keys gently with a slightly damp cloth
- Replace the battery when the display becomes dim (typically lasts 1-2 years with regular use)
- Keep the calculator away from strong magnetic fields
Common Mistakes to Avoid
- Incorrect Mode Settings: Always check whether you’re in BEGIN or END mode for annuity calculations
- Payment Direction: Remember that cash outflows (like investments) should be entered as negative numbers
- Compounding Periods: Ensure the compounding frequency matches the interest rate period
- Clearing Memory: Forgetting to clear previous calculations can lead to incorrect results
- Unit Consistency: Make sure all time periods are in the same units (e.g., all in years or all in months)
Sharp EL-738 vs. Smartphone Apps
While there are many financial calculator apps available, the Sharp EL-738 offers several advantages:
| Feature | Sharp EL-738 | Smartphone Apps |
|---|---|---|
| Exam Approval | Approved for most professional exams | Often not allowed in testing centers |
| Reliability | No crashes or freezes | Can crash or have bugs |
| Battery Life | Years on a single battery | Drains phone battery |
| Learning Curve | Standardized interface | Varies by app |
| Portability | Pocket-sized | Requires phone |
| Distraction-Free | Single-purpose device | Notifications and other apps can distract |
| Cost | One-time purchase ($30-$50) | Often requires subscription |
Advanced Calculation Examples
1. Mortgage Comparison
Scenario: You’re deciding between two 30-year mortgages:
– Option 1: $300,000 at 4.25% interest
– Option 2: $300,000 at 3.875% interest with $5,000 in points
Solution:
1. Calculate monthly payment for Option 1:
• PMT = $1,475.82
• Total interest = $231,295.20
2. Calculate monthly payment for Option 2:
• PMT = $1,413.46
• Total interest = $208,845.60
3. Add points to Option 2 total cost: $208,845.60 + $5,000 = $213,845.60
4. Compare total costs: Option 2 saves $17,449.60 over 30 years
5. Calculate break-even point: $5,000 / ($1,475.82 – $1,413.46) = 81 months (6.75 years)
2. Retirement Planning
Scenario: You want to retire in 30 years with $1,500,000. You currently have $100,000 saved and can contribute $1,200 monthly. What annual return do you need?
Solution:
Using the EL-738’s TVM functions:
• PV = -$100,000
• PMT = -$1,200 (monthly contribution)
• FV = $1,500,000
• N = 360 (30 years × 12 months)
• Solve for I/Y (annual interest rate)
Result: Approximately 6.75% annual return required
3. Business Investment Analysis
Scenario: Your company is considering a $500,000 equipment purchase that will generate $120,000 in additional annual profit for 6 years. The equipment will have no salvage value. Should you make the investment if your required rate of return is 12%?
Solution:
1. Enter cash flows:
• CF0 = -$500,000
• CF1-CF6 = $120,000
2. Set I/Y = 12%
3. Calculate NPV = $23,456
4. Calculate IRR = 12.87%
Decision: The positive NPV and IRR > required return indicate this is a good investment
Troubleshooting Common Issues
1. Incorrect Results
- Check that all values are entered with correct signs (cash outflows negative)
- Verify the compounding period matches the interest rate period
- Ensure you’ve cleared previous calculations (press ON/C)
- Check that you’re in the correct mode (BEGIN or END for annuities)
2. Display Issues
- If display is dim, replace the battery
- If display shows garbled characters, reset the calculator by removing and reinserting the battery
- Adjust contrast if numbers are hard to read (some models have a contrast adjustment)
3. Key Responsiveness
- Clean keys with a slightly damp cloth if they’re sticky
- Press firmly but not excessively – the calculator uses membrane keys
- If certain keys don’t respond, the calculator may need professional servicing
Professional Certifications That Allow the Sharp EL-738
The Sharp EL-738 is approved for use in many professional certification exams, making it a valuable tool for career advancement:
1. Chartered Financial Analyst (CFA)
The CFA Institute allows the Sharp EL-738 for all three levels of the CFA exam. The calculator’s time value of money and statistical functions are particularly useful for:
- Portfolio management questions
- Fixed income calculations
- Derivatives pricing
- Financial reporting and analysis
2. Certified Financial Planner (CFP)
CFP Board permits the EL-738 for its certification exam. Key applications include:
- Retirement planning calculations
- Insurance needs analysis
- Investment planning scenarios
- Tax planning computations
3. FINRA Securities Exams
The Financial Industry Regulatory Authority allows the Sharp EL-738 for exams including:
- Series 7 (General Securities Representative)
- Series 65 (Uniform Investment Adviser)
- Series 66 (Uniform Combined State Law)
- Series 6 (Investment Company Products)
4. Real Estate Licensing Exams
Many state real estate commissions permit the EL-738 for licensing exams, where it can be used for:
- Mortgage payment calculations
- Commission computations
- Property valuation analysis
- Investment property cash flow projections
Educational Applications
The Sharp EL-738 is widely used in academic settings for courses in:
- Finance: Corporate finance, investments, financial markets
- Accounting: Managerial accounting, cost accounting, auditing
- Economics: Microeconomics, macroeconomics, econometrics
- Business: Entrepreneurship, business strategy, operations management
- Real Estate: Property management, real estate finance, appraisal
Many textbooks in these fields include sections specifically dedicated to using financial calculators like the EL-738, with practice problems and step-by-step instructions.
Future of Financial Calculators
While smartphones and computers can perform many financial calculations, dedicated financial calculators like the Sharp EL-738 continue to be valuable because:
- They’re allowed in professional exams where other devices are prohibited
- They provide a standardized interface that professionals are trained to use
- They offer reliability and consistency without software updates or compatibility issues
- They’re designed specifically for financial calculations with optimized key layouts
- They don’t present the distractions that come with multi-purpose devices
Manufacturers continue to refine financial calculators, with recent models offering:
- Solar power options to extend battery life
- More memory for storing calculations
- Enhanced statistical functions
- Better displays with improved readability
- Integration with computer software for data transfer
Conclusion
The Sharp EL-738 financial calculator remains one of the most versatile and reliable tools for financial professionals, students, and investors. Its comprehensive set of functions covers virtually all common financial calculations, from simple interest problems to complex investment analysis. Whether you’re preparing for professional certification exams, managing personal investments, or making business financial decisions, the EL-738 provides the computational power and reliability you need.
By mastering this calculator, you gain not just a computational tool, but a deeper understanding of financial concepts and their practical applications. The time invested in learning its functions will pay dividends throughout your financial career, enabling you to make more informed decisions and perform complex analyses with confidence.