Savings; Section 15: Savings; Nominal Rate Converted To Effective Rate - HP 12c 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.
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
% is compounded quarterly ?
1
of 5 /
4
Keystrokes
gÂ
fCLEARG
5.25\
4nz¼
100Þ\
$M+
For repeated calculations, the following hp 12c program can be used:
KEYSTROKES
fs
fCLEARÎ 00-
gÂ
01-
02-
fCLEARG
n 03-
z
04-
¼
05-
06-
1
File name: hp 12c_user's guide_English_HDPMBF12E44
Printered Date: 2005/7/29
Section 15

Savings

Display
5.25
Nominal rate.
1.31
Percent quarterly interest rate.
5.35
Percent effective interest rate.
DISPLAY KEYSTROKES
0
0
Þ
43 8
42 34 \
11 $
M
10
+
12
fs
1
160
Page: 160 of 209
Dimension: 14.8 cm x 21 cm
DISPLAY
07- 0
08- 0
09- 16
10- 36
11- 13
12- 15
13- 40