Effective rate converted to nominal rate – HP 12C Financial calculator User Manual

Page 161

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Section 15: Savings 161

File name: hp 12c_user's guide_English_HDPMBF12E44

Page: 161 of 209

Printered Date: 2005/7/29

Dimension: 14.8 cm x 21 cm

REGISTERS

n: # Periods.

i: Nom. Rate/n

PV: 0

PMT: Used.

FV: Eff. Rate

R

0

–R

.9

: Unused

1. Key in the program.
2. Key in the annual nominal rate as a percentage then press \.
3. Key in the number of compounding periods per year then press t to

obtain the effective annual interest rate.

4. For a new case return to step 2.

Example 2: What is the effective annual rate of interest if the annual nominal
rate of 5

1

/

4

% is compounded monthly?

Keystrokes Display

5.25\

12t

5.38

Percent effective interest rate.

Effective Rate Converted to Nominal Rate

Given an effective interest rate and the number of compounding periods per year,
this routine calculates the nominal interest rate.

1. Press fCLEARG.
2. Key in the number of periods per year then press n.
3. Key in 100 then press \$.
4. Key in the effective annual rate as a percentage then press +ÞM¼.
5. Press :n§ to obtain the annual nominal rate.

Example: Find the nominal rate if the effective annual rate is 5.35%
compounded quarterly.

Keystrokes Display

fCLEARG

4n100\$

100.00

5.35+Þ

–105.35

1.31

:n§

5.25

Percent nominal interest rate.

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