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:
There are
two
compounding methods and
two
corresponding
\-
equations:
v
r
Periodic compounding;
for
o<ample,
quarterly, monthly,
or daily
v
compounding.
:
EFF%
:f(,
*
#=I
_
rl *
roo
L\
100xP/
I
\/
EFF%
and NOM% are the effective and nominal percentage inter-
v
est rates; P
is the number of
compounding periods Per
year.
r
Continuous compounding.
rv
1 NOMolo
\
\,
EFFo/o
: (r t' - r) x
roo
v
The variables
NOMO/o
and
EFF,|o
are shared between the two
v
equations.
v
To
do interest conversion
calculations:
v
l.
PressllEot-vel, then
ru.
v
2.
Type
the Solver periodic compounding
equation:
v
PERCI'IPD
I
EFFZ=( ( 1+H01.lZ+(
lBgxP)
)^P-1)xlgg
llNFUrr
v
3.
Press
f
.
Type
the
Solver continuous compounding
equation:
v
CONTCHPD
I
EFFZ=(EHp(HogZ+tgA)-1
)xtgB
l
tNpUTl
v
4.
Display the appropriate equation and
press
tn
to verify the
v
equation and display the menu
of
variables.
:
v
9: Additional
EramPles
1ll
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