Compound Interest with CMPD
QED Education Scientific
2
EXE
CMPD
0
3
0
0
EXE
1
0
(
─
)
0
EXE
EXE
SOLVE
6
•
2
5
0
0
1
2
EXE
1
2
EXE
CMPD
1
5
EXE
(
─
)
EXE
4
•
8
5
2
1
9
•
EXE
EXE
1
0
EXE
0
EXE
Example 3
►
>>
Find the monthly installment of a 25-year, $100,000 mortgage
loan at interest of 6.25% compounded monthly.
In this example, n = 25x12 = 300,
I
% = 6.25, PV = 100,000, P/Y (installment paid monthly) = C/Y = 12.
Operation
Enter CMPD mode. The calculator should display [Set:End] since payment is
made at the end of each period. Enter 25x12 for [n], 6.25 for [
I%
], (-)100,000 for
[PV], 12 for [P/Y] and 12 for [C/Y].
Scroll up to select [PMT] and solve it.
Therefore the monthly installment of the mortgage loan is about $659.70.
Suppose the mortgage loan above is calculated based on daily interest, so to find
the monthly repayment, we set [C/Y] as 365 and then solve for [PMT] again.
█
The CMPD mode also enables user to find other parameters such as interest rate.
Example 4
►
>>
The earning per share of common stock of a company increased
from $4.85 to $9.12 for the last 5 years. Find the compounded annual rate of
increase.
In this example, n = 5, PV = -4.85 (payment made earlier), FV = 9.12, while P/Y = C/Y = 1. All other
parameters = 0.
Operation
Enter CMPD mode, ensure that [Set:End] is displayed. Enter 5 for [n], -4.85 for
[PV], 9.12 for [FV] and 1 for both [P/Y] and [C/Y].
Output: PMT = 659.6693783
Screenshot from Casio TVM
Screenshot from Casio TVM
