HP (Hewlett-Packard) 0012C-90001 Calculator User Manual


 
134 Section 12: Real Estate and Lending
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 134 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
Keystrokes Display
4n
4.00
Years in investment.
10¼
10.00
Yearly appreciation rate.
70000$
70,000.00
House price.
t
32,391.87
NCPR (calculated).
t
19.56
Yield.
t
21,533.79
Balance in savings.
By purchasing a house, you would gain $10,858.08 (32,391.87 – 21,533.79)
over an alternate investment at 6.25% interest.
Deferred Annuities
Sometimes transactions are established where payments do not begin for a
specified number of periods; the payments are deferred. The technique for
calculating NPV may be applied assuming zero for the first cash flow. Refer to
pages 58 through 62.
Example 1:
You have just inherited $20,000 and wish to put some of it aside for
your daughter’s college education. You estimate that when she is of college age, 9
years from now, she will need $7,000 at the beginning of each year for 4 years
for college tuition and expenses. You wish to establish a fund which earns 6%
annually. How much do you need to deposit in the fund today to meet your
daughter’s educational expenses
?
Keystrokes Display
fCLEARH
0.00
Initialize.
0gJ
0.00
First cash flow.
0gK
8ga
0.00
8.00
Second through ninth cash flows.
7000gK
4ga
7,000.00
4.00
Tenth through thirteenth cash flows.
6¼
6.00
Interest.
fl
15,218.35
NPV.