How to Calculate IRR on TI-83 Plus / TI-84 Plus: Step-by-Step Guide

While the TI-83 Plus and TI-84 Plus (including the TI-84 Plus CE Color Edition) are designed primarily for algebra and calculus, they are powerful enough to handle complex financial calculations. If you have one of these devices on hand, you don't need to purchase a specialized financial calculator (like the BA II Plus) to calculate Internal Rate of Return (IRR) and Net Present Value (NPV).

It is highly efficient and capable.

Although professional financial calculators have dedicated keys, the graphing calculator's List feature handles cash flows just as intuitively. This guide will walk you through the specific steps to master this technique.

The Challenge: Dealing with Lists

The main difference is that the TI-84 doesn't have dedicated Cash Flow keys. Instead, we use Lists. Think of List 1 (L1) as your "Cash Flow" column in Excel, and List 2 (L2) as your "Frequency" column.

Let's Use a Real Scenario

Imagine you're thinking about buying a small espresso cart to run on weekends.

• Start-up Cost: $12,000 (This is your negative initial investment)
• Year 1 Profit: $3,000
• Year 2 Profit: $4,000
• Year 3 Profit: $4,000
• Year 4 Profit: $5,000 (You sell the cart)

What is the Internal Rate of Return (IRR) of this coffee venture?

Step 1: Input Your Data

First, we need to feed these numbers into the calculator.

1. Press the [STAT] button.
2. Select 1:Edit... and press [ENTER].
3. You should see columns like L1, L2, L3. (If they are full of old data, move the cursor to the top of the column, press [CLEAR] then [ENTER]).
4. In L1 (Cash Flows): Enter your profits.
   • 3000 [ENTER]
   • 4000 [ENTER]
   • 5000 [ENTER]
   
   Wait, why didn't we enter the duplicate 4000s separately? You can, but let's use the Frequency list (L2) to be efficient!
5. In L2 (Counts): Enter how many times each cash flow happens.
   • 1 [ENTER] (For the $3k in Year 1)
   • 2 [ENTER] (For the $4k in Years 2 & 3)
   • 1 [ENTER] (For the $5k in Year 4)

Step 2: Finding the Function

Now that the data is stored, let's calculate the IRR.

1. Press [2nd] then [QUIT] to go back to the home screen.
2. Press the [APPS] button (purple button usually).
3. Select 1:Finance.
4. Scroll down until you find 8:irr(. Press [ENTER].

Step 3: The Secret Syntax

This is where most students get stuck. The TI-83/84 needs the command in a specific order:

For our coffee cart:

1. Type -12000 (Make sure to use the white [(-)] key for negative, not the minus sign!).
2. Press [,] (comma).
3. Press [2nd] then [1] to type L1.
4. Press [,] (comma).
5. Press [2nd] then [2] to type L2.
6. Close parenthesis [)] and hit [ENTER].

Your screen should look like this:

irr(-12000, L1, L2)

The Result

The calculator should spit out approximately 11.57. This means your coffee cart project has an Internal Rate of Return of 11.57%.

If your "hurdle rate" (the minimum return you want) is 10%, then congratulations! You should buy the cart.

Common Syntax Errors (Read This!)

"ERR: SYNTAX"

You probably used the big Minus [-] key instead of the Negative [(-)] key for the $12,000. The calculator treats them differently.

"ERR: DOMAIN" or Strange Answers

Did you match the lengths of L1 and L2? If you have 3 numbers in L1, you must have 3 numbers in L2. If you miss a frequency, the calculator gets confused.

What about NPV?

Need Net Present Value instead? It's almost the same process.

• Go to [APPS] → Finance → 7:npv(.
• Syntax: npv(InterestRate, InitialOutlay, L1, L2)
• Example: If you want a 10% return: npv(10, -12000, L1, L2)

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Summary

The TI-84 Plus is perfectly capable of handling college-level finance questions. It's just a bit more hidden than on a BA II Plus.

However, for the real world?

Nobody manages a real portfolio on a graphing calculator. When you're back at your desk, save the lists for statistics class and use a tool built for the job.