HP 17bII+ Instruction Manual page 4

hp calculators
HP 17bII+ Time-Value-Of-Money
Analysis/solution: You've got five financial registers to work with. Take the
information given you in this problem and decide where each
of the numbers should go.
First, the $5,000. You are starting out with this money, aren't
you? So, that should go in present value. But, how about the
sign? From the saver's point of view, the $5,000. should have a
negative sign. Why? Sure, the money belongs to the saver.
But the money is flowing away from the saver, isn't it,
when the saver hands it over to the bank for the bank's use.
We want to show that direction of cash flow by putting a
negative sign on the $5,000. Press the '+/-' button. Now, if we
were to do this from the bank's viewpoint, then we would
make the $5,000. positive.
Next, the 4%. That pretty clearly goes in the I%YR register,
doesn't it. Remember that you insert the yearly interest or
discount rate in the I%YR register and the calculator will take
care of charging the proper interest per period that is being
compounded or discounted, whether that is weekly, monthly,
annually, or some other time frame. It knows to do this, as
long as you have told it by setting the payments per year as we
described above. It should be set at 12 P/YR.
Now to the 3 years. It is being compounded monthly for three
years, that is, a total of 36 months or compounding periods.
This is the number that should go in the N register and you
can just hit '36' and 'N' to get it into the 'N' register. But
your calculator has a convenient feature that figures this out
for you. Just press in the number of years, hit the shift
key, and press 'N.' It multiplies the number of years by the
payments per year that you have already set and puts the
resulting number in the 'N' register. So, you don't have to
calculate the actual number of periods that will appear in 'N'
as long as you have pre-set your calculator to the number of
payments per year you want.
You have told your HP 17bll+ all the information it needs to
solve for what you will have in this savings account after 3
years. So, press the button of the register you are looking for.
And which register is that? Well, future value, right? You are
looking for how much money you will have in the future. After
you pressed the FV button, are you looking at $5,636.36?
Good. Congratulations!
hp calculators - 4 - HP 17bII+ Time-Value-Of-Money