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File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 160 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
Section 15
Savings
Nominal Rate Converted to Effective Rate
Given a nominal interest rate and the number of compounding periods per year,
this keystroke procedure computes the effective annual interest rate.
1. Press g and fCLEARG.
2. Key in the annual nominal rate as a percentage, then press \.
3. Key in the number of compounding periods per year, then press nz¼.
4. Key in 100 then press Þ\$.
5. Press M+ to obtain the effective annual interest rate.
Example 1:
What is the effective annual interest rate if the annual nominal rate
of 5
1
/
4
% is compounded quarterly
?
Keystrokes Display
gÂ
fCLEARG
5.25\
5.25
Nominal rate.
4nz¼
1.31
Percent quarterly interest rate.
100Þ\
$M+
5.35
Percent effective interest rate.
For repeated calculations, the following hp 12c program can be used:
KEYSTROKES DISPLAY KEYSTROKES DISPLAY
fs
0
07- 0
f
CLEAR
Î
00-
0
08- 0
gÂ
01- 43 8
Þ
09- 16
f
CLEAR
G
02- 42 34
\
10- 36
n
03- 11
$
11- 13
z
04- 10
M
12- 15
¼
05- 12
+
13- 40
1
06- 1
fs