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hp 17bII+ Financial Calculator
Owner's Manual
Edition 1
Part Number F2234-90020

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Table of Contents

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  • Page 1 hp 17bII+ Financial Calculator Owner’s Manual Edition 1 Part Number F2234-90020...
  • Page 2 Hewlett-Packard Co. shall not be liable for any errors or for incidental or consequential damages in connection with the furnishing, performance, or use of this manual or the examples contained herein.
  • Page 3 Welcome to the hp 17bII+ The hp 17bII+ is part of Hewlett-Packard’s new generation of calculators: ! The two-line display has space for messages, prompts, and labels. ! Menus and messages show you options and guide you through problems. ! Built-in applications solve these business and financial tasks: Time Value of Money.
  • Page 4: Table Of Contents

    Contents List of Examples Important Information Getting Started Power On and Off; Continuous Memory Adjusting the Display Contrast Setting the Language What You See in the Display The Shift Key ( Backspacing and Clearing Doing Arithmetic Keying in Negative Numbers ( &...
  • Page 5 Error Messages Modes Calculator Memory ( Arithmetic The Calculator Line Doing Calculations Using Parentheses in Calculations The Percent Key The Mathematical Functions The Power Function (Exponentiation) The MATH Menu Saving and Reusing Numbers The History Stack of Numbers Reusing the Last Result ( Storing and Recalling Numbers Doing Arithmetic Inside Registers and Variables Scientific Notation...
  • Page 6 Converting between Two Currencies Storing and Recalling Sets of Currencies Clearing the Currency Variables Time Value of Money The TVM Menu Cash Flow Diagrams and Signs of Numbers Using the TVM Menu Loan Calculations Savings Calculations Leasing Calculations Amortization (AMRT) Displaying an Amortization Schedule Printing an Amortization Table Interest Rate Conversions...
  • Page 7 Bonds The BOND Menu Doing Bond Calculations Depreciation The DEPRC Menu Doing Depreciation Calculations DB, SOYD, and SL Methods The ACRS Method Partial-Year Depreciation Running Total and Statistics The SUM Menu Creating a SUM List Entering Numbers and Viewing the TOTAL Viewing and Correcting the List Copying a Number from a List to the Calculator Line...
  • Page 8 The Time Menu Setting the Time and Date (SET) Changing the Time and Date Formats (SET) Adjusting the Clock Setting (ADJST) Appointments (APPT) Viewing or Setting an Appointment (APT1-APT10) Acknowledging an Appointment Unacknowledged Appointments Clearing Appointments Date Arithmetic (CALC) Determining the Day of the Week for Any Date Calculating the Number of Days between Dates Calculating Past or Future Dates The Equation Solver...
  • Page 9 How the Solver Works Halting and Restarting the Numerical Search Entering Guesses Printing The Printer’s Power Source Double-Space Printing Printing the Display( Printing Other Information ( Printing Variables, Lists, and Appointments (LIST) Printing Descriptive Messages (MSG) Trace Printing (TRACE) How to Interrupt the Printer Additional Examples Loans Simple Annual Interest...
  • Page 10 Assistance, Batteries, Memory, and Service Obtaining Help in Operating the Calculator Answers to Common Questions Power and Batteries Low-Power Indications Installing Batteries Managing Calculator Memory Resetting the Calculator Erasing Continuous Memory Clock Accuracy Environmental Limits Determining If the Calculator Requires Service Confirming Calculator Operation: Self-Test Warranty Service...
  • Page 11 Cash-Flow Calculations Bond Calculations Depreciation Calculations Sum and Statistics Forecasting Equations Used in (Chapter 14) Canadian Mortgages Odd-Period Calculations Advance Payments Modified Internal Rate of Return Menu Maps RPN: Summary About RPN About RPN on the hp 17bII+ Setting RPN Mode Where the RPN Functions Are Doing Calculations in RPN Arithmetic Topics Affected by RPN Mode...
  • Page 12 Reusing Numbers Chain Calculations Exercises RPN: Selected Examples Error Messages Index Contents...
  • Page 13: List Of Examples

    List of Examples The following list groups the examples by category. Getting Started Using Menus Using the Solver Arithmetic Calculating Simple Interest Unit Conversions Simple Interest at an Annual Rate (RPN example on page 276) General Business Calculations Percent Change Percent of Total Markup as a Percent of Cost Markup as a Percent of Price...
  • Page 14 An Individual Retirement Account Calculating a Lease Payment Present Value of a Lease with Advanced Payments and Option to Buy Displaying an Amortization Schedule for a Home Mortgage Printing an Amortization Schedule Calculations for a Loan with an Odd First Period Discounted Mortgage APR for a Loan with Fees (RPN example on page 276)
  • Page 15 Bonds and Notes Price and Yield of a Bond A Bond with a Call Feature A Zero-Coupon Bond Yield to Maturity and Yield to Call Price and Yield of a Discounted Note Depreciation Declining-Balance Depreciation ACRS Deductions Partial-Year Depreciation Running Total and Statistical Calculations Updating a Checkbook Mean, Median, and Standard Deviation Curve Fitting...
  • Page 16: Important Information

    Important Information ! Take the time to read chapter 1. It gives you an overview of how the calculator works, and introduces terms and concepts that are used throughout the manual. After reading chapter 1, you’ll be ready to start using all of the calculator’s features. ! You can choose either ALG (Algebraic) or RPN (Reverse Polish Notation) mode for your calculations.
  • Page 17: Getting Started

    Getting Started Watch for this symbol in the margin. It identifies examples or keystrokes that are shown in ALG mode and must be performed differently in RPN mode. Appendixes D, E, and F explain how to use your calculator in RPN mode. The mode affects only arithmetic calculations ―...
  • Page 18: Setting The Language

    Setting the Language The calculator can display information in six different languages. The language initially used by the calculator was preset at the factory. To change the language: 1. Press the @ > 2. Press to display the INTL menu, which stands for "international".
  • Page 19: The Shift Key ( @ )

    Alarm going off Shift ( ) is Sending information Batteries low. (or past due). active. to the printer. (page 224) (page 147) (page 19) (page 184) Annunciators Calculator Cursor line Menu labels for the MAIN menu. To display the MAIN menu, press (that is, first , then The Shift Key (...
  • Page 20 Table 1-2. Keys for Clearing Description Backspace; erases the character before the cursor. < Clear; clears the calculator line. (When the calculator is off, this key turns the calculator on, but without clearing anything.) This clears all information in the current work area (menu).
  • Page 21: Doing Arithmetic

    Doing Arithmetic The “ ” in the margin is a reminder that the example keystrokes are for ALG mode. This is a brief introduction to doing arithmetic. More information on arithmetic is in chapter 2. Remember that you can erase errors by pressing <...
  • Page 22: Keying In Negative Numbers ( & )

    " Use parentheses to impose '*&+%" an order of calculation. Keying in Negative Numbers ( & ) & key changes the sign of a number. ! To key in a negative number, type that number, then press & ! To change the sign of an already displayed number (it must be the rightmost number), press &...
  • Page 23: The Main Menu

    Menu Labels Menu Keys The top row of keys is related to the labels along the bottom of the display. The labels tell you what the keys do. The six keys are called menu keys; the labels are called menu labels. The MAIN Menu The MAIN menu is a set of primary choices leading to other menu options.
  • Page 24 Table 1-3. The MAIN Menu Operations Done in Menu Label Covered in: This Category " # TVM: Time value of money: Chapter 5 (Finance) loans, savings, leasing, amortization. ICNV: Interest conversions. Chapter 6 CFLO: Lists of cash flows for Chapter 7 internal rate of return and net present value.
  • Page 25: Choosing Menus And Reading Menu Maps

    Choosing Menus and Reading Menu Maps Below is a menu map illustrating one possible path through three levels of menus: from the MAIN menu to the BUS menu to the MU%C (markup as a percent of cost) menu. There are no menus that branch from the MU%C menu because the MU%C menu is a final destination―you use it to do calculations, rather than to choose another menu.
  • Page 26 index and examine the menu maps in appendix C. Displaying the MU%C menu: Step 2. To display the MAIN menu, press . This step lets you start from a known location on the menu map. Step 3. Press to display the BUS menu. Step 4.
  • Page 27: Calculations Using Menus

    Calculations Using Menus Using menus to do calculations is easy. You don’t have to remember in what order to enter numbers and in what order results come back. Instead, the menus guide you, as in the previous example. All the keys you need are together in the top row.
  • Page 28: Exiting Menus ( E )

    Many menus in this calculator work like the example above. The rules for using variables are: ∗† ! To store a value, key in the number and press the menu key. Arithmetic calculations, as well as single values, can be stored. ! To calculate a value, press the menu key without first keying in a number.
  • Page 29: Solving Your Own Equations (solve)

    ! If the current menu has a list (SUM, CFLO, or Solver), pressing clears the values in the list. To see what value is currently stored in a variable, press menu label. Solving Your Own Equations (SOLVE) This chapter has introduced some of the built-in menus the calculator offers.
  • Page 30: Typing Words And Characters: The Alphabetic Menu

    Typing Words and Characters: the ALPHAbetic Menu The ALPHAbetic menu is automatically displayed when you need it to type letters and characters. The ALPHA menu also includes characters not found on the keyboard: ! Uppercase letters. ! Space. ! Punctuation and special characters. ! Non-English letters.
  • Page 31: Editing Alphabetic Text

    Keys Characters " " & / 5 " 2 . 3 4 5?" 2 5 , 6 5?@A" 5?@AB9B" 5?@AB9BCD,8" , : 0 ; 5?@AB9BCD,87E" < = < > 5?@AB9BCD,87EF:" 5?@AB9BCD,87EF:" Note that the ? is just a character, part of the variable’s name. It is not an operator, which ÷...
  • Page 32: Calculating The Answer (calc)

    Table 1-4. Alphabetic Editing Operation Label or Key to Press ALPHA-Edit Menu Inserts character before the cursor. Any character. Deletes character at the cursor. Moves the cursor far left, one display-width. Moves the cursor left. Moves the cursor right. Moves the cursor far right, one display-width.
  • Page 33 Calculate the cost of carpet needed to cover a 9’ by 12’ room. The carpet costs $22.50 per square yard. Starting from the MAIN menu (press Keys: Display: Description: & 5?@AB9BCD,87EF:" Displays the SOLVE menu and the current equation. " Displays the customized menu for carpeting.
  • Page 34: Controlling The Display Format

    Controlling the Display Format The DSP menu (press ) gives you options for formatting numbers. You can pick the number of decimal places to be displayed, and whether to use a comma or a period to “punctuate” your numbers. Decimal Places To change the number of displayed decimal places, first press the key.
  • Page 35: Rounding A Number

    Rounding a Number function rounds the number in the calculator line to the number of displayed decimal places. Subsequent calculations use the rounded value. Starting with two displayed decimal places: Keys: Display: Description: .&-*-!" 5.787 " Four decimal places are .&-*-("...
  • Page 36: Error Messages

    Error Messages Sometimes the calculator cannot do what you “ask”, such as when you press the wrong key or forget a number for a calculation. To help you correct the situation, the calculator beeps and displays a message. ! Press <...
  • Page 37: Calculator Memory ( @m )

    Language. Press @> to change the language. Calculator Memory ( The calculator stores many different types of information in its memory. Each piece of information requires a certain amount of storage space. You can monitor the amount of available memory by pressing Number of bytes of Percentage of total memory still free...
  • Page 38: The Calculator Line

    Arithmetic If you prefer RPN to algebraic logic, please read appendix D before you read this chapter. The “ “ in the margin is a reminder that the example keystrokes are for ALG mode. The Calculator Line The calculator line is the part of the display where numbers appear and calculations take place.
  • Page 39: Using Parentheses In Calculations

    In the second case, the key acts like the key by displaying the result of 750 x 12. Here’s a longer chain calculation. 456 - 75 × 18.5 This calculation can be written as: 456 − 75 ÷ 18.5 x 68 ÷ 1.9. Watch what happens in the display as you key it in: Keys: Display:...
  • Page 40: The Percent Key

    Note that you must include a for multiplication; parentheses do not imply multiplication. The Percent Key key has two functions: Finding a Percentage. In most cases, divides a number by 100. The one exception is when a plus or minus sign precedes the number. (See “Adding or Subtracting a Percentage,”...
  • Page 41: The Power Function (exponentiation)

    Table 2-1. Shifted Math Functions Description reciprocal square root square Keys: Display: Description: (&$." Reciprocal of 4. +&+-" Calculates 20 . 47.2 .#&'-B" Calculates 4.47 + 47.20. .#&'-B#&$#" Calculates 1.1 '$&.$" Completes calculation of (4.47 + 47.2) x1.1 The Power Function (Exponentiation) The power function, , raises the preceding number to the power of the following number.
  • Page 42: The Math Menu

    The MATH Menu To display the MATH menu, press (the shifted key). Like the other mathematics functions, these functions operate on only the last number in the display. Table 2-2. The MATH Menu Labels Menu Label Description Common (base 10) logarithm of a positive number. Common (base 10) antilogarithm;...
  • Page 43: Saving And Reusing Numbers

    Saving and Reusing Numbers Sometimes you might want to include the result of a previous calculation in a new calculation. There are several ways to reuse numbers. The History Stack of Numbers When you start a new operation, the previous result moves out of the display but is still accessible.
  • Page 44: Reusing The Last Result

    Pressing clears the history stack. Be careful if a menu is active, because then also erases the data associated with that menu. Keys: Display: Description: 75.55 32.63 " +$&,$" 42.92 moves out of $#&+%" display. Now, suppose you want to multiply 42.92 x 11. Using the history stack saves you time.
  • Page 45: Storing And Recalling Numbers

    An equivalent keystroke sequence for this problem would be: Storing and Recalling Numbers key copies a number from the calculator line into a designated storage area, called a storage register. There are ten storage registers in calculator memory, numbered 0 through 9. The key recalls stored numbers back to the calculator line.
  • Page 46: Doing Arithmetic Inside Registers And Variables

    keys can also be used with variables. For example, (in the MU%C menu) stores the rightmost number from the display into the variable M%C. copies the contents of M%C into the calculator line. If there is an expression in the display (such as $)+! ), then the recalled number replaces only the last number.
  • Page 47: Scientific Notation

    You can also do arithmetic with the values stored in variables. For example, (in the MU%C menu) multiplies the current contents of M%C by 2 and stores the product in M%C. Scientific Notation Scientific notation is useful when working with very large or very small numbers.
  • Page 48: Range Of Numbers

    Range of Numbers The largest positive and negative numbers available on the calculator are ±9.99999999999 x 10 ; the smallest positive and negative numbers available are ±1 x 10 –499 2: Arithmetic...
  • Page 49: Percentage Calculations In Business

    Percentage Calculations in Business The business percentages (BUS) menu is used to solve four types of problems. Each type of problem has its own menu. TIME SOLVE CURRX %CHG %TOTL MU%C MU%P Table 3-1. The Business Percentages (BUS) Menus Menu Description Percent change The difference between two numbers (OLD and...
  • Page 50: Using The Bus Menus

    The calculator retains the values of the BUS variables until you clear them by pressing . For example, pressing while in the %CHG menu clears OLD, NEW, and %CH. To see what value is currently stored in a variable, press menu label.
  • Page 51: Percent Of Total (%totl)

    90000 E9A8,(K(((&(( " Stores 90,000 in OLD. 95000 <HC8,.K(((&((" Stores 95,000 in NEW. 67M1<=H8.&.'" Calculates percent change. What would this year’s sales have to be to show a 12% increase from last year? OLD remains 90,000, so you don’t have to key it in again. Just enter %CH and ask for NEW.
  • Page 52: Markup As A Percent Of Cost (mu%c)

    Markup as a Percent of Cost (MU%C) Example. The standard markup on costume jewelry at Balkis’s Boutique is 60%. The boutique just received a shipment of chokers costing $19.00 each. What is the retail price per choker? Keys: Display: Description: "...
  • Page 53: Sharing Variables Between Menus

    Sharing Variables Between Menus If you compare the MU%C menu and the MU%P menus, you’ll see that they have two menu labels in common –– %CHG %TOTL MU%C MU%P COST PRICE COST PRICE Shared variables The calculator keeps track of the values you key in according to those labels.
  • Page 54: 54 Currency Exchange Calculation

    Currency Exchange Calculations The CURRX menu does currency exchange calculations between two currencies using an exchange rate that you calculate or store. The CURRX Menu SOLVE CURRX TIME US$ EUR RATE C.STO C.RCL SELCT To display the currency exchange menu from the MAIN menu, press Currency #1 is US$ Currency #2 is EUR (U.S Dollar)
  • Page 55: Selecting A Set Of Currencies

    Table 4–1. The CURRX Menu Menu Key Description Curr1 Current currency#1;stores or calculates the number of units of this currency Curr2 Currency currency#2;stores or calculates the number of units of this currency Stores or calculates the exchange rate between the two current currencies.
  • Page 56 Table 4–2. Currencies ; # < # # = #> " United States Austria, Greece, Canada United Kingdom of America Belgium, Ireland, Italy, (Dollars) (Pounds) (Dollars) Germany, Luxembourg, Spain, Netherlands, Finland, Portugal, France, Vatican City (EURO) ? # @ # A # B #C # Switzerland Israeli Denmark...
  • Page 57: Entering A Rate

    Entering a Rate The following two examples illustrate the two ways to enter an exchange rate. Example: Calculating an Exchange Rate. You have just flown from Canada to United States, and you need to exchange your Canadian Dollars for U.S Dollars. The conversion chart looks this : United States Conversion Chart (in US$) Currency Rate...
  • Page 58 0.6584 4FN8(&''" Stores equivalent number of US$ 21:H8(&''" Calculates the RATE. Part 2: The following keystrokes show that you can reverse the order in which the two currencies are selected. Keys: Display: Description: FH9H7: 7422H<7@ $" Select US$ as currency #1 H<:H2 1 21:H"...
  • Page 59: Converting Between Two Currencies

    Converting Between Two Currencies Once the currencies are selected and a RATE has been entered, you can convert any number of units of one currency to the other. Example : Converting between Hong Kong and U.S Dollars. Part 1: Use the exchange rate stored in the previous example to calculate how many U.S dollars you would receive for 3,000 Hong Kong Dollars.
  • Page 60: Clearing The Currency Variables

    Recalling Sets of Currencies. To recall a stored set of currencies and their exchange rate, press , followed by the appropriate menu key. The hp 17bII+ automatically returns to the CURRX menu. The equivalency message and menu labels show the recalled currencies and RATE.
  • Page 61: Time Value Of Money

    Time Value of Money The phrase time value of money describes calculations based on money earning interest over a period of time. The TVM menu performs compound-interest calculations and calculates (and prints) amortization schedules. ! In compound interest calculations, interest is added to the principal at specified compounding periods, thereby also earning interest.
  • Page 62 The time value of money (TVM) menu does many compound-interest calculations. Specifically, you can use the TVM menu for a series of cash flows (money received or money paid) when: ! The dollar amount is the same for each payment. ! The payments occur at regular intervals.
  • Page 63 Table 5-1. TVM Menu Labels Menu Label Description First Level Stores (or calculates) the total number of payments or *† compounding periods. (For a 30-year loan with monthly payments, N=12 x 30=360.) Shortcut for N: Multiplies the number in the display by P/YR, and stores the result in N.
  • Page 64: Cash Flow Diagrams And Signs Of Numbers

    Table 5-1. TVM Menu Labels (Continued) Menu Label Description Second Level (Continued) Sets Begin mode: payments occur at the beginning of each period. Typical for savings plans and leasing. (The Begin and End modes do not matter if PMT=0.) Sets End mode: payments occur at the end of each period.
  • Page 65 (receipts) as positive. Perform a calculation from the point of view of either the lender (investor) or the borrower, but not both! (Loan) Money re- ceived is a Equal periods positive number Money paid out is a negative Equal payments number (FV is Future Value,...
  • Page 66: Using The Tvm Menu

    Payments occur at either the beginning of each period or the end of each period. End mode is shown in the last two figures; Begin mode is shown in the next figure. Capitalized value of lease Figure 5-5. Lease Payments Made at the Beginning of Each Period (Begin Mode) Using the TVM Menu First draw a cash-flow diagram to match your problem.
  • Page 67: Loan Calculations

    4. Store the values you know. (Enter each number and press its menu key.) 5. To calculate a value, press the appropriate menu key. You must give every variable―except the one you will calculate―a value, even if that value is zero. For example, FV must be set to zero when you are calculating the periodic payment (PMT) required to fully pay back a loan.
  • Page 68 Keys: Display: Description: " ] " Displays TVM menu. #$ 5?@2 H<A 0EAH" Clears history stack and TVM variables. " If needed: sets 12 " payment periods per year; #$ 5?@2 H<A 0EAH" End mode. " Figures and stores number <8%'&(("...
  • Page 69 11.5 12; End mode _ 630 Keys: Display: Description: " ] ! " Display TVM menu. #$ 5?@2 H<A 0EAH" Clears history stack and TVM variables. " If needed: sets 12 payment #$ 5?@2 H<A 0EAH" periods per year; End mode.
  • Page 70 75 ,250 13.8 12; End mode Balloon. The problem is done in two steps: 1. Calculate the monthly payment without the balloon (FV=0). 2. Calculate the balloon payment after 4 years. Keys: Display: Description: " ] " Display TVM menu. #$ 5?@2 H<A 0EAH"...
  • Page 71: Savings Calculations

    Step 2. Calculate the balloon payment after 4 years. 894.33 " Stores rounded PMT value & 50:8/*,+&%%" for exact payment amount (no fractional cents). <8+*&((" Figures and stores number of payments in 4 years. 5O8/-%K+(*&*#" Calculates balloon payment after four years. This amount plus last monthly payment repays the loan.
  • Page 72 Keys: Display: Description: " ] " Displays TVM menu. #$ 5?@2 H<A 0EAH" Clears history stack and TVM variables. " Sets one compounding " per./yr. (one interest #"5?@2 H<A"0EAH" pmt./yr.). Payment mode does not matter. ;6@28-&$(" Stores annual interest rate. 2000 &...
  • Page 73 2 12; End mode 15 12 2 _ 80 2,000 Keys: Display: Description: " " ] Displays TVM menu. It is not necessary to clear data because you do not need to set any of the values to zero. " Sets 24 payment periods "...
  • Page 74: Leasing Calculations

    Leasing Calculations Two common leasing calculations are 1) finding the lease payment necessary to achieve a specified yield, and 2) finding the present value (capitalized value) of a lease. Leasing calculations typically use “advance payments”. For the calculator, this means Begin mode because all payments will be made at the beginning of the period.
  • Page 75 ;6@28#+&((" Stores annual interest rate. 13500 " Stores car’s value in PV. & 5O8/#%K.((&((" (Money paid out by lessor.) 7500 GO8-K.((&((" Stores purchase option value in FV. (Money received by lessor.) 50:8$*,&#," Calculates monthly payment received. Example: Present Value of a Lease with Advance Payments and Option to Buy.
  • Page 76 Keys: Display: Description: " ] " Displays TVM menu. #$ 5?@2 H<A 0EAH" Clears history stack and TVM variables. " Sets 12 payment periods " per year; Begin mode. #$ 5?@2 JH=;<" 0EAH" Step 1: Find the present value of the monthly payments. <8+-&(("...
  • Page 77: Amortization (amrt)

    5O8-K%+(&+%" Calculates present value of the buy option. Step 4: Add the results of step 2 and 3. ,#K+-'&((" Calculates present, capitalized value of lease. Amortization (AMRT) The AMRT menu (press ] . \ ) displays or prints the following values: ! The loan balance after the payment(s) are made.
  • Page 78: Displaying An Amortization Schedule

    Table 5-2. AMRT Menu Labels Menu Description Label Stores the number of payments to be amortized, and calculates an amortization schedule for that many payments. Successive schedules start where the last schedule left off. #P can be an integer from 1 through 1,200.
  • Page 79 2. Store the values for I%YR , PV, and PMT. (Press & to make PMT a negative number.) If you need to calculate one of these values, follow the instructions under “Using the TVM Menu,” on page 66. Then go on to step 3.
  • Page 80 Next successive set of payments authorized To calculate a subsequent schedule with a different number of payments, key in that number and press To start over from payment #1 (using the same loan information), press and proceed from step 7. Example: Displaying an Amortization Schedule.
  • Page 81: Printing An Amortization Table

    payments, but does not display it. ;<:H2HF:8/*K##%&#'" D isplays interest paid in first year. 52;<7;5198/$##&+*" Displays principal paid in first year. J191<7H8'+K-**&.$" Displays balance at end of first year. P58#$ 50:FI #%/$+" Calculates amortization schedule for next 12 payments. ;<:H2HF:8/*K(*.&#." D isplays results for second year.
  • Page 82 6. Press Ignore the message 3H@ P50:FQ 52HFF RP5S . 7. Press 8. Key in the payment number of the first payment in the schedule and press . (For instance, for the very first payment, FIRST= 1.) 9. Key in the payment number of the last payment in the schedule and press 10.Key in the increment ―...
  • Page 83 (1 year). " Calculates and prints amortization schedule shown below. ;6@28" #$&.(" 5O8" '.K(((&((" 50:8" /',%&-$" GO8" (&((" 5?@28" #$&((" H<A 0EAH" " 50:FI+,/'(" ;<:H2HF:8" /-K,-'&*-" 52;<7;5198" /%+-&--" J191<7H8" '%K'$$&,+" " 50:FI'#/-$" ;<:H2HF:8" /-K,%(&*$" 52;<7;5198" /%,%&*$" J191<7H8" '%K$$,&#$" " 5: Time Value of Money...
  • Page 84: Interest Rate Conversions

    Interest Rate Conversions The interest conversion (ICNV) menu converts between nominal and effective interest rates. To compare investments with different compounding periods, their nominal interest rates are converted to effective interest rates. This allows you, for example, to compare a savings account that pays interest quarterly with a bond that pays interest semiannually.
  • Page 85: The Icnv Menu

    The ICNV Menu TIME SOLVE CURRX ICNV CFLO BOND DEPRC CONT NOM% EFF% NOM% EFF% The ICNV menu converts between nominal and effective interest rates, using either: ! Periodic compounding; for example, quarterly, monthly, or daily compounding. ! Continuous compounding. Converting Interest Rates To convert between a nominal annual interest rate and an effective annual interest rate that is compounded periodically :...
  • Page 86 To convert between a nominal annual interest rate and an effective annual interest rate that is compounded continuously : 1. Press " h to get the interest conversions menu. 2. Press for “continuous”. 3. To convert to the effective rate, key in the nominal rate and press , then press 4.
  • Page 87: Compounding Periods Different From Payment Periods

    58+&((" Stores number of compounding periods per year for bank #1. <E068'&-(" Stores nominal annual interest rate for bank #1. HGG68'&*-" Calculates effective interest rate for bank #1. 58#$&((" Stores number of compounding periods per year for bank #2. <E068'&'." 6.65 Stores nominal annual interest rate for bank #2.
  • Page 88 interest rate in the TVM menu. (You can also use TVM if PMT = 0, regardless of the compounding periods.) 1. Call up the periodic interest-rate conversion menu ( " h 2. Calculate the effective annual interest rate from the nominal annual interest rate given by the bank.
  • Page 89 effective interest rate based on your payment periods. Last, convert the effective rate to the nominal rate based on the bank’s compounding periods. Example: Balance of a Savings Account. Starting today, you make monthly deposits of $25 into an account paying 5% interest compounded daily (365-day basis).
  • Page 90 " Stores 84 deposit periods, " $25 per deposit, and no & 5O8(&((" money before the first regular deposit. GO8$K.#,&'#" Value of account in 7 years. If the interest rate were the unknown, you would first do the TVM calculation to get I%YR (5.01). Then, in the ICNV PER menu, store 5.01 as NOM% and 12 as P for monthly compounding.
  • Page 91: Cash Flow Calculations

    Cash Flow Calculations The cash flow (CFLO) menu stores and analyzes cash flows (money received or paid out) of unequal (ungrouped) amounts that occur at regular intervals. Once you’ve entered the cash flows into a list, you can calculate: ! The total amount of the cash flows. ! The internal rate of return (IRR%).
  • Page 92: Cash Flow Diagrams And Signs Of Numbers

    Table 7-1. CFLO Menu Labels Menu Label Description Accesses the CALC menu to calculate TOTAL, IRR%, NPV, NUS, NFV. Allows you to insert cash flows into a list. Deletes cash flows from a list. Allows you to name a list. Allows you to switch from one list to another or create a new list.
  • Page 93 $300 Money received is a $250 positive number $200 $200 $125 $100 Time periods $ _ 50 Money paid out is a negative number Figure 7-1. Cash Flows (Ungrouped) The horizontal timeline is divided into equal compounding periods. The vertical lines represent the cash flows. For money received, the line points up (positive);...
  • Page 94: Creating A Cash-flow List

    Figure 7-2. Grouped Cash Flows After an initial payment of $100, the investor pays $100 at the end of periods 1 through 5, and $200 at the end of periods 6 through 8. The investment returns $1,950 at the end of period 9. For every cash flow you enter, the calculator prompts you to indicate how many times (#TIMES) it occurs.
  • Page 95: Entering Cash Flows

    Entering Cash Flows To enter cash flows into a CFLO list: 1. Press " r . You will see either G9ECL(T8U if the current list is empty, or G9ECL# or more T8U if the list is not empty. This is the bottom of the current list.
  • Page 96 been automatically set to 1, and #&(( is displayed on the calculator line. Do either a or b: To retain the value 1 and go on to the next flow, press To change #TIMES, key in the number and press Given #TIMES Calculator line 7.
  • Page 97: Viewing And Correcting The List

    The #TIMES prompting is usually on, because it is automatically turned on whenever you clear or get a cash-flow list. Example: Entering Cash Flows. Enter the following ungrouped cash flows in a list and find the percentage internal rate of return (IRR). $-500 $ 275 Keys:...
  • Page 98: Copying A Number From A List To The Calculator Line

    keys move up and down one number at a time. display the beginning and end of the list. Changing or Clearing a Number. To change a number after it’s been entered: display the number, key in the new value, and press Use this same method to clear a number to zero.
  • Page 99: Starting Or Getting Another List

    The name can be up to 22 characters long and include any character except:+ - x ÷ ( ) < > : = space But only the first three to five characters (depending on letter widths) of the name are used for a menu label. Avoid names with the same first characters, since their menu labels will look alike.
  • Page 100: Cash-flow Calculations: Irr, Npv, Nus, Nfv

    To remove just one value at a time from a list, use Cash-Flow Calculations: IRR, NPV, NUS, NFV Once you have entered a list of cash flows, you can calculate the following values in the CALC menu. ! Sum (TOTAL). ! Internal rate of return (IRR%).
  • Page 101 Table 7-2. The CALC Menu for CFLO Lists Menu Label Description Calculates the sum of the cash flows. Calculates the internal rate of return―the interest (discount) rate at which the net present value of the cash flows equals zero. Stores the periodic interest rate, expressed as a percentage (sometimes called cost of capital, discount rate, or required rate of return).
  • Page 102 Example: Calculating IRR and NPV of an Investment. An investor makes an initial investment of $80,000, and expects returns over the next five years as illustrated below. 115,000 5,500 5,000 4,500 4,000 $ _ 80,000 (Initial flow) Calculate the total of the cash flows and the internal rate of return of the investment.
  • Page 103 assumed to occur just once. 80000 G9ECL#T8U" Prompts for next cash & /*(K(((&((" flow. Calculator line shows last number entered. G9ECL$T8U" 5000 Stores $5,000 for FLOW(1), prompts for next flow. G9ECL%T8U" 4500 Stores FLOW(2). 5500 G9ECL+T8U" Stores FLOW(3). G9ECL.T8U" 4000 Stores FLOW(4).
  • Page 104 <5O8$K-'$&+%" Calculates new NPV. Example: An Investment with Grouped Cash Flows. You are considering an investment that requires a cash outlay of $9,000, with the promise of monthly cash flows as shown. Calculate IRR%. Also find NPV and NFV at an annual interest rate of 9%. $ _ 9,000 Since some of these cash flows are grouped (consecutive and equal), the #TIMES prompting must be on so you can specify a number other...
  • Page 105 G9ECL(T8U" prompting is turned on. 9000 G9ECL#T8U" Stores the initial cash & I flow. P:;0HFL#T8#" Stores FLOW(1) and prompts for #TIMES(1). G9ECL$T8U" FLOW(1) occurs 3 times; prompts for next cash flow. " 1000 Stores FLOW(2) four G9ECL%T8U" times. " Stores FLOW(3) one time G9ECL+T8U"...
  • Page 106 Calculate the annual rate of return for this investment. (The prompting for #TIMES should be on.) Keys: Display: Description: " r " Current cash-flow list. " Clears the current list or " gets a new one. This sets " the #TIMES prompting on. G9ECL(T8U"...
  • Page 107: Doing Other Calculations With Cflo Data

    G9ECL.T8U" " Calculates quarterly rate ;2268$&+%" of return. ,&-$" Calculates nominal annual rate of return from quarterly rate. Doing Other Calculations with CFLO Data If you would like to do other calculations with cash flows besides those in the CALC menu, you can do so by writing your own Solver equations. There are Solver functions that can access data stored in CFLO lists, and there is a summation function that can combine all or part of the values stored in specific lists.
  • Page 108: The Bond Menu

    Bonds The BOND menu calculates the yield to maturity or price of a bond. It also calculates yield to call on a coupon date and accrued interest. You can specify the: ! Calendar basis: 30/360 or actual/actual (days per month/days per year).
  • Page 109 Table 8-1. BOND Menu Labels Menu Description Label Displays a menu of bond types: 30/360 or actual/actual, semi-annual or annual. Stores the settlement (purchase) date according to the current date format (MM.DDYYYY or DD.MMYYYY; see page 143). Stores the maturity date or call date according to the current date format.
  • Page 110: Doing Bond Calculations

    Doing Bond Calculations Remember that values in the BOND menu are expressed per $100 face value or as a percentage. A CALL value of 102 means that the bond will be worth $102 for every $100 of face value when called. Some corporate bonds in the United States use the convention that the price of the bond is set to 100 if the coupon rate equals the yield, whether or not the settlement date is a coupon date.
  • Page 111 maturity, the CALL value must equal 100. (See step 3.) 8. To calculate a result, first press to access the remaining menu labels. Do either a or b: Key in the yield and press • . Press to calculate the price.
  • Page 112 01:8(.?(#?$(#* :4H" 6.75 75<68'&-." Stores annual coupon rate. " Stores desired yield " (displayed rounded to two • @9A68*&%*" decimal places). 52;7H8*'&%*" Result: price is $86.38 per $100 face value. € *'&%*)#&*." Adds accrued interest owed the seller. **&$%" Net price. Suppose that the market quote for the bond is 88¼.
  • Page 113 5.022003 FH::8" Stores purchase date (.?($?$((% G2;" (MM.DDYYYY format). 3.032022 01:8(%?(%?$($$ :M4" Stores maturity date. 75<68'&((" Stores annual coupon rate. Stores yield. " • @9A68.&-(" 52;7H8#(%&+%" Calculates price. " 3.032006 Changes maturity date " 102.75 to call date and stores 71998#($&-."...
  • Page 114: 114 Depreciation

    Depreciation The DEPRC (depreciation) menu calculates depreciation values and remaining depreciable values one year at a time. The methods available are: Declining balance. Sum-of-the-years’ digits. Straight line. Accelerated Cost Recovery System. The DEPRC Menu TIME SOLVE CURRX ICNV CFLO BOND DEPRC BASIS SALV...
  • Page 115 Table 9-1. DEPRC Menu Labels Menu Description Label † Stores the depreciable cost basis of the asset at acquisition. ‡ ! Stores the salvage value of the asset at the end of its useful life. If there is no salvage value, set SALV=0. ˆ...
  • Page 116: Doing Depreciation Calculations

    To see the value currently stored in a variable, press menu label. Doing Depreciation Calculations DB, SOYD, and SL Methods To calculate the depreciation for an asset: 1. Display the DEPRC menu: press " … 2. Define the characteristics of the asset: Key in the cost basis and press †...
  • Page 117 Example: Declining-Balance Depreciation. A metalworking machine, purchased for $10,000, is to be depreciated over 5 years. Its salvage value is estimated at $500. Find the depreciation and remaining depreciable value for each of the first 3 years of the machine’s life using the double-declining-balance method (200% of the straight-line rate).
  • Page 118: The Acrs Method

    2AO8%K*((&((" Remaining depreciable value after third year using SL. The ACRS Method To calculate the amount of tax deduction under the U.S. Accelerated Cost Recovery System: 1. Display the DEPRC menu: press " … 2. Enter the cost basis of the asset and press †...
  • Page 119: Partial-year Depreciation

    ‰ 172F68$.&((" Tabular value, year 2. Š 172F8'K$.(&((" Deduction in second year. ‰ 172F68$(&((" Tabular value, year 3. Š 172F8.K(((&((" Deduction in third year. Partial-Year Depreciation When the acquisition date of an asset does not coincide with the start of the tax or fiscal year, then the amounts of depreciation in the first and last years are computed as fractions of a full year’s depreciation.
  • Page 120 Calendar Year Depreciation Value 1 (Oct.-Dec.) ¼ x year 1 (¾ x year 1) + (¼ x year 2) (¾ x year 2) + (¼ x year 3) 4 (Jan.-Sept.) ¾ x year 3 Example: Partial-Year Depreciation. A movie camera bought for $12,000 has a useful life of 10 years with a salvage value of $500.
  • Page 121: Running Total And Statistics

    Running Total and Statistics The SUM menu stores and statistically analyzes sets of numbers. As you enter the numbers, the calculator displays their running total. Once you’ve entered the numbers into a list, you can: ! Calculate the mean, median, standard deviation, and range. ! Display the largest and smallest number in the list.
  • Page 122: The Sum Menu

    The SUM Menu TIME SOLVE CURRX CALC INSR DELET NAME TOTAL TOTAL MEAN MEDN STDEV RANGE MORE SORT FRCST MORE The SUM menu creates lists of numbers and performs calculations with a SUM list. Table 10-1. SUM Menu Labels Menu Description Label Accesses the CALC menu to calculate the total, mean,...
  • Page 123: Creating A Sum List

    To see the calculator line when this menu is in the display, press once. (This does not affect number entry.) To see this menu when the calculator line is in the display, press Creating a SUM List To keep a running total of a list of numbers or do statistical calculations with sets of data, first create a SUM list of the values.
  • Page 124: Viewing And Correcting The List

    After briefly showing ITEM(1), the display shows " ;:H0L$T8U" :E:19 =number TOTAL is the updated, running TOTAL of all the numbers in the list (only one number, so far). 4. To enter ITEM(2), key in the value and press . The prompt for ITEM(3) and the new, updated total appear.
  • Page 125 Deleting Numbers from a List. Pressing deletes the current item. Example: Updating a Checkbook. On May 31, your checking account balance was $267.82. The transactions for the first 10 days in June are: Date Transaction Amount Date Transaction Amount Balance 267.82 Check -128.90...
  • Page 126: Copying A Number From A List To The Calculator Line

    55.67 ;:H0L*T8U" :E:198..%&(-" ;:H0L*T8U" Ends list and displays SUM menu again. Copying a Number from a List to the Calculator Line To copy a number from the list into the calculator line, use display the number, then press Naming and Renaming a SUM List A new list has no name.
  • Page 127: Starting Or Getting Another List

    Starting or GETting Another List When you press , the SUM list that appears is the last one used. To start a new list or switch to a different one, the current list must be named or cleared. If it is named, then: 1.
  • Page 128: Calculations With One Variable

    Calculations with One Variable The CALC menu calculates the following statistical values using one SUM list. Table 10-2. The CALC Menu for SUM Lists Menu Key Description Calculates the sum of the numbers in the list. • ! Calculates the arithmetic mean (average). ‘...
  • Page 129 Phone Phone Month Month Expense Expense 1. May $340 4. August $780 2. June $175 5.September $245 3. July $450 6. October $625 Calculate the mean, median, and standard deviation of the monthly phone bills. Then display the smallest value in the list. Keys: Display: Description:...
  • Page 130: Calculations With Two Variables (frcst)

    deviation. " Displays rest of CALC menu. ” 0;<8#-.&((" Finds smallest number. Calculations with Two Variables (FRCST) The FRCST menu does the following two-variable calculations using two SUM lists: ! Fits x- and y-data to a linear, logarithmic, exponential, or power curve.
  • Page 131 CALC TOTAL MEAN MEDN STDEV RANGE MORE SORT FRCST MORE (select x and y) x-list y-list CORR MORE MODL W.MN G.SD SIZE MORE MORE After pressing — , you must specify two previously created lists― one for the x-variable and one for the y-variable. The two lists must have the same number of items.
  • Page 132 Table 10-3. FRCST Menu Labels Menu Label Description list name for x-variable These specify the two lists of data to be list name for y-variable compared. Also used for estimations:store x and estimate y, or vice-versa. ˜ the menu label for an unnamed current list. ™...
  • Page 133: Curve Fitting And Forecasting

    Curve Fitting and Forecasting Curve fitting is a statistical method for finding a relationship between two variables, x and y. Based on this relationship, you can estimate new values of y based on a given x-value, and vice-versa. Each SUM list holds the numbers (data values) for one variable.
  • Page 134 To do curve fitting and forecasting : 1. Enter the data into two SUM lists: one for the x-values and one for the y-values. Make sure each list has the same number of items so that the items are in matched pairs. 2.
  • Page 135 Number of Minutes of Radio Dollar Sales Advertising (y-values, (x-values, SALES ) MINUTES ) Week 1 $1,400 Week 2 $ 920 Week 3 $1,100 Week 4 $2,265 Week 5 $2,890 Week 6 $2,200 BJ’s wants to determine whether there is a linear relationship between the amount of radio advertising and the weekly sales.
  • Page 136 Keys: Display: Description: " Displays current SUM list and SUM menu keys. " Clears current list. ;:H0L#T8U" " Stores minutes of " advertising (x-values) into " a SUM list. " " ;:H0L-T8U" :E:198$(&((" :@5H"1"<10HIV;<54:W" MINUTES " Names this list. (See page ;:H0L-T8U"...
  • Page 137 " FH9H7: @ O12;1J9H" Selects MINUTES as x-list, 0;<4" " 9;<H12 " SALES as y-list, indicates F19HF" current curve-fitting model, and displays FRCST menu. ™ 7E228(&,(" Correlation coefficient for linear model. The correlation coefficient calculated above is acceptable to BJ’s. Using the linear model, estimate what the level of sales would be if the business purchased 7 minutes of advertising time per week.
  • Page 138: Weighted Mean And Grouped Standard Deviation

    Weighted Mean and Grouped Standard Deviation Data in one list (x) can be weighted or grouped (by frequency) by data in another list (y). To find the mean of weighted data and the standard deviation of grouped data: 1. Enter the data values―the x-variable―into a SUM list. 2.
  • Page 139: Summation Statistics

    ;:H0L.T8U" :E:198*%#&((" Names this list RENT. (See " RENT page 30 to use the ALPHA ;:H0L.T8U" menu.) ;:H0L#T8U" Gets a new, empty list. " Stores frequencies into " second list. " ;:H0L.T8U" :E:198$''&((" Displays names of all " ) — SUM lists.
  • Page 140: Doing Other Calculations With Sum Data

    statistics for just one list of data, specify the same list for both x and y. 2. To see n, press ) ¡ 3. Press again to display the summation menu, and press the menu label for the value you want. Doing Other Calculations with SUM Data If you would like to do other statistical calculations with SUM data besides those in the CALC menu, you can do so by writing your own...

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