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Section 15: Savings; Nominal Rate Converted To Effective Rate - HP 12C Platinum Owner's Handbook Manual

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Nominal Rate Converted to Effective Rate

Given a nominal interest rate and the number of compounding periods per year,
this keystroke procedure computes the effective annual interest rate.
1. Press g and fCLEARG.
2. Key in the annual nominal rate as a percentage, then press \.
3. Key in the number of compounding periods per year, then press nz¼.
4. Key in 100 then press Þ\$.
5. Press M+ to obtain the effective annual interest rate.
Example 1: What is the effective annual interest rate if the annual nominal rate
of 5¼% is compounded quarterly?
Keystrokes (RPN mode)
fCLEARG
5.25\
4nz¼
100Þ\
$M+
For repeated calculations, the following HP 12C Platinum program can be used:
KEYSTROKES
(RPN mode)
f]
fs
000,
f
000,
CLEAR
Î
001,
f
002,
CLEAR
G
n
003,
z
004,
Section 15
Savings
Display
Nominal rate.
5.25
Percent quarterly interest rate.
1.31
Percent effective interest rate.
5.35
KEYSTROKES
DISPLAY
(RPN mode)
0
0
Þ
\
43
8
$
42
34
M
11
+
10

Section 15: Savings

157
DISPLAY
007,
008,
009,
16
010,
36
011,
13
012,
15
013,
40
0
0

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