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Hewlett-Packard 10B Tutorial
Page 4
Periods per Year Setting
One important setting that can cause problems is the periods per year setting. To check the current setting,
CLEAR ALL
press
and then press and hold down
. The display shows the setting for periods/year.
The calculator comes pre-set at 12 periods per year, that is, it assumes calculations will be done on a
monthly basis. However, finance textbook problems generally use 1 period/year. To change to 1/year:
P/YR
Press 1
.
Now the calculator is set to assume 1 period/year. To confirm this setting, press and hold
CLEAR ALL
. Unless needed for other work, we generally leave the calculator setting at 1 period per year.
Time Value of Money (TVM)
The TVM keys are located on the top row of the keyboard.
N
I/YR
PV
PMT
FV
In general, TVM problems involve four variables—three are known and the fourth is unknown.
Lump Sums
To begin, we consider TVM calculations with single (lump) sums. In this situation, we do not use the PMT
key, so be sure to either clear all, which sets the payment (PMT) equal to 0, or enter 0 as the PMT when
entering the input data. If you know any three variables, you can find the value of the fourth.
Example 1:
CLEAR ALL
What is the FV of $100 after 3 years if the interest rate is 26 percent? First, clear with
.
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