Savings Savings; Nominal Rate Converted To Effective Rate - HP 0012C-90001 User Manual

Nominal Rate Converted to Effective Rate

Nominal Rate Converted to Effective Rate Nominal Rate Converted to Effective Rate Nominal Rate Converted to Effective Rate
Given a nominal interest rate and the number of compounding periods per year,
this keystroke procedure computes the effective annual interest rate.
1. Press g and fCLEARG.
2. Key in the annual nominal rate as a percentage, then press \.
3. Key in the number of compounding periods per year, then press wz¼.
4. Key in 100 then press Þ\$.
5. Press M+ to obtain the effective annual interest rate.
Example 1: What is the effective annual interest rate if the annual nominal rate of Example 1:
Example 1: Example 1:
1
5 / % is compounded quarterly ?
4
Keystrokes Keystrokes Keystrokes Keystrokes
gÂ
fCLEARG
5.25\
4wz¼
100Þ\
$M+
For repeated calculations, the following hp 12c program can be used:
KEYSTROKES KEYSTROKES
KEYSTROKES KEYSTROKES
fs
fCLEARÎ
00-
gÂ
01-
fCLEARG
02-
w
03-
z
04-
¼
05-
Section 15
Savings Savings
Savings Savings
Display Display Display Display
5.25 Nominal rate.
1.31 Percent quarterly interest rate.
5.35 Percent effective interest rate.
DISPLAY DISPLAY KEYSTROKES KEYSTROKES
DISPLAY DISPLAY KEYSTROKES KEYSTROKES
0
0
Þ
43 8
\
42 34
$
11
M
10
+
12
160 160 160 160
DISPLAY DISPLAY
DISPLAY DISPLAY
07- 0
08- 0
09- 16
10- 36
11- 13
12- 15
13- 40