Finance: Annuities And Compound Amounts - HP -11C Owner's Handbook Manual

186 Saction 10; Applications Programs
which must be given) can be either inputs or outputs:
n; The number of compounding periods. (For a 30 year loan
with monthly payments, n = 12 x 30 = 360.)
i; The periodic interest rate expressed as a percentage. (For
other than annual compounding, divide the annual percent-
age rate by the number of compounding periods in a year, ie.,
10% annual interest compounded monthly equals 10/12 or
0.83%.)
PV: The present value of the cash flow or compound amounts.
PMT: The periodic payment.
FV: The future value; the final cash flow (balloon payment or
remaining balance) or the compounded value of a series of
cash flows.
ma a as
a
Section 10: Applications Programs = 187
Possible Solutions Using
Annuities and Compound Amounts
{Interest is given)
ie |
Allowable Applications
Combination Initial
of Ordinary Annuity Procedure
Variables Annuity Due
n, PV, PMT, Directreduc- { Leases Use
(input any two | tion loan (A CLEAR [REG
and calculate Discounted or set FV to zero
the third). notes
Mortgages
n, PV, PMT, FV | Directreduc- | Lease with None |
(input any three
and calculate
tion loan with | residual values
balloon
) the fourth). Discounted
Accumulated interest and remaining balance may also be notes with
computed with this program. balloon
The program
accommodates payments which are made at the
n, PMT, FV
Sinking fund Periodic
Use : ~|
beginning or end of compounding periods. Payments made at the
) (input any two
savings, (QCLEAR
end of compounding periods (ordinary annuity) are common in
and calculate
{
or set FV to zero
direct reduction
loans and mortgages while. payments at the
) the third),
nburance
beginning of compounding periods (annuity due) are common in is +
leasing. For ordinary annuity press [A] and then [R7S] until 1 is y ua PVC EY: Compound SROUSE Use
{input anytwo | Savings (AICLEAR
displayed. For annuity due press [A] then [R/S] until 0 is displayed.
This program uses the convention that cash outlays are input as
negative, and cash incomes are input as positive.
Pressing CLEAR provides a safe, convenient, easy to
remember method of preparing the calculator for a new problem.
However, it is not necessary to use {f] CLEAR [REG] between
problems containing the same combination of variables, For
instance, any number of n, i, PV, PMT, FV problems involving
different numbers and/or different combinations of knowns can be
done in succession without clearing the registers. Only the values
which change from problem to problem would have to be keyed in.
To change the combination of variables without using [f] CLEAR
[REG], simply input zero for any variable which is no longer
applicable. To go from a problem where n, i, PMT, PV are knowns
to a problem where n, i, PV, FV are knowns, a zero would be stored
in place of PMT. The following table summarizes these procedures.
we he he YS SY YR Ye VY VY VY VY YY
oa
and calculate (Annuity mode is not applicable | or set PMT to zero
| the third) and has no effect)
Equations:
~PV= i. A[1—(1+i)")+(FV) (1 +i)"
where as { 1 ordinary annuity
(+i) annuity due
Note:
® Problems with an interest rate of 0 will result in Error 0.
e Problems with extremely high (10°) or low values (10°) for n or
i may give invalid results.