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Applications
Investments
The following applications use the financial keys pressed in left to right
order to obtain solutions. Some of the applications use interactive and
basic keys also. As in ordinary
tables,
the number of years and interest
rate must be converted to reflect the number of compounding periods
if differen t from those specified. When con verting years to periods,
mul-
tiply the years by the number of compounding periods per
year,
and load
the result by pressing • . When converting an interest rate to its
pe-
riodic
equivalent,
divide the rate by the number of compounding periods
per year and load the result by pressing • . Then proceed with the
calculation.
Compounded Amounts
Future Value of Compounded Amount
This calculation finds the future value of an amount compounded at a
certain interest rate over a specified number of
periods.
Information is
entered as follows:
CD Enter number of time periods, press • .
al Enter rate per period, press • .
o
Enter principal (present value), press
m
o
Press
iii
to obtain the future value.
Sample Case 1: What is the future value of $500 invested at 6% for 7
years if interest is compounded annually?
Solution
Enter:
See Displayed:
7 . 6 . 5 0 0
mlil-
$
_
value in 7 years
compounded annually
Sample Case 2: What is the future value of the same $500 invested
at the same rate (6%) for the same number of years (7) if compounded
quarterly? The necessary intermediate calculations can be done in your
head or as follows on the HP-80:
25
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