Solver Calculations - HP -18C Owner's Manual

To enter a guess:
1. Key in an estimate of IRR%.
2. Press
I
STO
111m.
When it is calculating IRR% using a guess you've entered, the
HP-18C displays the current estimate of IRR% and the calculated
value of NPV for each iteration. The calculation halts when the
HP-18C finds an answer near your guess. However, there may be
additional positive or negative answers or there may be no solution.
You can continue searching for other solutions by halting the calcula-
tion and entering a different guess.
One way to obtain a good guess for IRR% is to calculate NPV for
various interest rates (1%). Since IRR% is the interest rate at which
NPV equals 0, the best estimate of IRR% is the interest rate that
yields the value for NPV closest to O.
To find a good estimate for IRR%, key in a guess for IRR% and press
. . . Then, press . . to calculate NPV for that value. Repeat the
calculation of NPV for several values of 1%, and look for trends in the
results. Choose as your guess for IRR% the value of 1% that produces
an NPV closest to
O.
Solver Calculations
In most cases, the solver calculates and displays the answer to your
problem, because there is only one correct answer and the formula is
easy for the solver to interpret. However, the solver is capable of han-
dling a wide variety of complex mathematical conditions. In order for
you to use all the calculating power included in the solver, it will be
helpful to you to understand, in a general way, how it works.
B: More About HP-18C Calculations 171