The Cash Flow Sign Convention - HP 0012C-90001 User Manual

12c financial calculator
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36
36
Section 3: Basic Financial Functions
Section 3:
Basic Financial Functions
36
36
Section 3:
Section 3:
Basic Financial Functions
Basic Financial Functions
The form in which
performs financial calculations in Odd-Period mode (as described on pages
50 through 53). If
digit to the right of the decimal point), calculations of
performed in Odd-Period mode.
i
is the interest rate
cash flow diagram and entered into the calculator is determined by dividing
the annual interest rate by the number of compounding periods. In the
problem illustrated above,
PV
present value
— the
series of future cash flows. In the problem illustrated above,
initial deposit.
PMT
is the period
deposited each month. When all payments are equal, they are referred to as
annuities
. (Problems involving equal payments are described in this section
under Compound Interest Calculations; problems involving unequal
payments can be handled as described in under Discounted Cash Flow
Analysis: NPV and IRR. Procedures for calculating the balance in a savings
account after a series of
the
hp 12c Solutions Handbook
FV
future value
— the
series of prior cash flows. In the particular problem illustrated above,
unknown (but can be calculated).
Solving the problem is now basically a matter of keying in the quantities identified
in the cash flow diagram using the corresponding keys, and then calculating the
unknown quantity by pressing the corresponding key. In the particular problem
illustrated in the cash flow diagram above,
problems, as we shall see later,
Likewise, in the particular problem illustrated above there are four known
quantities that must be entered into the calculator before solving for the unknown
quantity; but in other problems only three quantities may be known — which must
n
i
always include
or
.
The Cash Flow

The Cash Flow Sign Convention

The Cash Flow
The Cash Flow
Sign Convention
Sign Convention
Sign Convention
PV
When entering the
the calculator with the proper sign, + (plus) or – (minus), in accordance with ...
The Cash Flow Sign Convention:
The Cash Flow Sign Convention:
The Cash Flow Sign Convention:
The Cash Flow Sign Convention:
entered or displayed as a positive value (+). Money paid out (arrow pointing
down) is entered or displayed as a negative value (–).
n
is entered determines whether or not the calculator
n
noninteger
is a
per compounding period
i
= 6% ÷ 12.
— is the initial cash flow or the present value of a
payment
. In the problem illustrated above
irregular
and/or
.)
— is the final cash flow or the compounded value of a
FV
n
i
PV
,
,
, or
PMT
FV
,
, and
cash flows, the quantities must be keyed into
Money received (arrow pointing up) is
(that is, there is at least one nonzero
i
PV
PMT
,
,
. The interest rate shown in the
PV
unequal
deposits are included in
is the unknown quantity; but in other
PMT
could be the unknown quantity.
FV
, and
are
is the $1,000
PMT
is the $50
FV
is

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