HP 12C Financial calculator - Manual (Page 134)

134 Section 12: Real Estate and Lending
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 134 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
Keystrokes Display
4n 4.00 Years in investment.
10¼ 10.00 Yearly appreciation rate.
70000$ 70,000.00 House price.
t 32,391.87 NCPR (calculated).
t 19.56 Yield.
t 21,533.79 Balance in savings.
By purchasing a house, you would gain $10,858.08 (32,391.87 – 21,533.79)
over an alternate investment at 6.25% interest.
Deferred Annuities
Sometimes transactions are established where payments do not begin for a
specified number of periods; the payments are deferred. The technique for
calculating NPV may be applied assuming zero for the first cash flow. Refer to
pages 58 through 62.
Example 1: You have just inherited $20,000 and wish to put some of it aside for
your daughter’s college education. You estimate that when she is of college age, 9
years from now, she will need $7,000 at the beginning of each year for 4 years
for college tuition and expenses. You wish to establish a fund which earns 6%
annually. How much do you need to deposit in the fund today to meet your
daughter’s educational expenses?
Keystrokes Display
fCLEARH 0.00 Initialize.
0gJ 0.00 First cash flow.
0gK
8ga 0.00
8.00 Second through ninth cash flows.
7000gK
4ga 7,000.00
4.00 Tenth through thirteenth cash flows.
6¼ 6.00 Interest.
fl 15,218.35 NPV.