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Section 3: Basic Financial Functions 35
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 35 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
The exchange of money in a problem is depicted by vertical arrows. Money you
receive is represented by an arrow pointing up from the point in the time line when
the transaction occurs; money you pay out is represented by an arrow pointing
down.
Suppose you deposited (paid out) $1,000 into an account that pays 6% annual
interest and is compounded monthly, and you subsequently deposited an
additional $50 at the end of each month for the next 2 years. The cash flow
diagram describing the problem would look like this: