Straightforward Compound Interest - HP 39g Master Manual

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PV
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PMT
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FV
When using the aplet is it important to visualize the cash flow in terms of
positive cash (inwards) or negative cash (outwards). This can be illustrated
simply via the following example. Always bear this principle in mind when
deciding how to plan your setup of the aplet.

Straightforward compound interest

Invest $1000 into a bank account paying 6.5% per annum
for 5 years. Interest is calculated monthly and credited to
the account at the end of each month. What is the
investment worth at the end of the period?
Looked at from the point of view of the person
investing the money, the cash flow is initially
outwards (negative) by $1000. The final
payment is inwards (positive) and no payments
(withdrawals) are made during the period of
the investment. Five years of monthly payments means that N is 60. The view
on the right shows the problem on the calculator. The
pressed to give a future value FV of $1816.70.
This is the present value of the initial flow of cash. In a
loan, this is the amount of the loan. In an investment,
the amount invested. PV is always the amount at the
start of the first period, however long that may be.
This is the size of the periodic payment. The
assumptions made are that all payments are the same
size and that no payments will be skipped. Payments
can occur at the beginning or the end of a compounding
period, depending on the setting of Mode.
The future value of the investment or loan. This could
be the amount in a bank account after a period of years,
the residual on a lease, the amount still owing on a loan
after N repayments, or the remaining value of an
investment which has been paying income as an
annuity.
Calculator Tip
As can be seen above, the designers of this aplet chose to
display money to 2 decimal places and using comma
separators. This choice is independent of the settings in
the MODES view. When entering values do not use
commas as they will simply result in a syntax error.
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