Savings; Nominal Rate Converted To Effective Rate; Section 15: Savings - HP 12C Platinum User Manual

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.
RPN Mode:
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. Press ÞPM to obtain the effective annual interest rate.
ALG Mode:
2. Key in the annual nominal rate as a percentage.
3. Press z. Key in the number of compounding periods per year, then
press ¼ÞP. Then key in the number of compounding periods per
year and press n.
4. Press M to obtain the effective annual interest rate.
Example 1: What is the effective annual interest rate if the annual nominal rate
of 5.25% is compounded quarterly ?
Keystrokes Keystrokes
(RPN mode) (ALG mode)
f] f[
g gÂ
fCLEARG fCLEARG
5.25\ 5.25z
4nz¼ 4¼
ÞPM
ÞP4nM
Section 15

Savings

Display
5.25
1.31
5.35
217
Nominal rate.
Percent quarterly interest
rate.
Percent effective interest
rate.