Interest Rate Conversions - HP -18C Owner's Manual

Interest Rate Conversions
The
ICONV
(interest conversion) menu converts between nominal and
effective interest rates, using either of two compounding methods:
• Periodic compounding; for example, quarterly, monthly, or daily
compounding .
• Continuous compounding.
To convert between nominal and effective interest rates, starting from
the
MAIN
menu:
1. Press " " then . . to display the
ICONV
menu.
2. Press the menu key for the desired compounding method (do a
or
b):
a.
Press
IIIBI
for periodic compounding.
b.
Press
BIll
for continuous compounding.
3. Key in the nominal (or effective) interest rate and press
1mB
(or
IDD).
4. For periodic compounding only: Key in the number of periods
per year and press . ..
5. Press
IDD
(or
1mB)
to calculate the effective (or nominal)
interest rate.
Values of EFF% and NOM% are shared between the
EFFCT
and
CO NT
menus. For example, if you calculate an effective interest rate in
CONT,
that value remains stored in EFF% if you exit the
CO NT
menu
and enter the
EFFCT
menu.
4: Time Value of Money 77