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6: Interest Rate Conversions 87
File name : English-M02-1-040308(Print).doc Print data : 2004/3/9
4 Stores number of
compounding periods per
year for bank #1.
6.7 Stores nominal annual
interest rate for bank #1.
Calculates effective
interest rate for bank #1.
12 Stores number of
compounding periods per
year for bank #2.
6.65 Stores nominal annual
interest rate for bank #2.
Calculates effective
interest rate for bank #2.
e
Displays CONT menu.
Previous values of NOM%
and EFF% are retained.
Calculates effective rate
for bank #3.
The calculations show that bank #3 is offering the most favorable
interest rate.
Compounding Periods Different from
Payment Periods
The TVM menu assumes that the compounding periods and the payment
periods are the same. However, regularly occurring savings- account
deposits and withdrawals do not necessarily occur at the same time as
the bank’s compounding periods. If they are not the same, you can
adjust the interest rate using the ICNV menu, and then use the adjusted