Calculating The Payment Amount - HP 12C User Manual

58 Section 3: Basic Financial Functions
Example 2: A development company would like to purchase a group of
condominiums with an annual net cash flow of $17,500. The expected holding
period is 5 years, and the estimated selling price at that time is $540,000.
Calculate the maximum amount the company can pay for the condominiums in
order to realize at least a 12% annual yield.
Keystrokes
fCLEARG
5n
12¼
17500P
540000M
gÂ
$

Calculating the Payment Amount

1. Press fCLEARG to clear the financial registers.
2. Enter the number of payments or periods, using n or gA.
3. Enter the periodic interest rate, using ¼ or gC.
4. Enter either or both of the following:
Present value, using $.
Future value, using M.
File name: hp 12c pt_user's guide_English_HDPMF123E27
Printed Date: 2005/8/1
Display
5.00
Stores n.
12.00
Stores i.
17,500.00
Stores PMT. Unlike in the previous
problem, here PMT is positive
since it represents cash received.
540,000.00
Stores FV.
540,000.00
Sets payment mode to End.
–369,494.09
The maximum purchase price to
provide a 12% annual yield. PV
is displayed with a minus sign
since it represents cash paid out.
Note: Remember to observe the
cash flow sign convention.
Page: 58 of 275
Dimension: 14.8 cm x 21 cm