HP 10bII+ User Manual page 88

Table 6-23 Calculating the interest rate (First bank)
Keys
\Ð
Second Bank
Table 6-24 Calculating the interest rate (Second bank)
Keys
S7SV\Ó
JG\Í
\Ð
Third Bank
Table 6-25 Calculating the interest rate (Third bank)
Keys
S7SD\Ó
DS:\Í
\Ð
First Bank offers a slightly better deal since 6.87 is greater than 6.86 and 6.85.
Compounding and Payment Periods Differ
The TVM application assumes that the compounding periods and the payment periods are
the same. Some loan installments or savings deposits and withdrawals do not coincide with
the bank's compounding periods. If the payment period differs from the compounding period,
adjust the interest rate to match the payment period before solving the problem.
To adjust an interest rate when the compounding period differs from the payment period
complete the following steps:
1. Enter the nominal rate and press
in a year and press
2. Enter the number of payment periods in a year and press
adjusted nominal rate by pressing
80 Time Value of Money Calculations
Display
6.87
Display
6.65
12.00
6.86
Display
6.63
360.00
6.85
\Ó
\Í
. Solve for the effective rate by pressing
\Ó
Description
Calculates the annual effective rate.
Description
Stores nominal rate.
Stores monthly compounding
periods.
Calculates the annual effective rate.
Description
Stores nominal rate.
Stores compounding periods.
Calculates the annual effective rate.
. Enter the number of compounding periods
\Í
.
\Ð
.
. Solve for the