Time Value of Money Calculations 81
Example: Monthly Payments, Daily Compounding
Starting today, you make monthly deposits of 25 to an account paying 5% interest,
compounded daily (using a 365 day year). What will the balance be in seven years?
Step
1
Calculate the equivalent rate with monthly compounding.
Since
NOM%
and
I/YR
share the same memory, this value is ready for use in the rest of the
problem.
Step
2
Calculate the future value.
Set to Begin mode. Press
\¯
if
BEGIN
annunciator is
not
displayed.
Table 6-26 Calculating the equivalent nominal percentage rate
Keys
Display
Description
V\Ó
5.00
Stores nominal percentage rate.
DSV\Í
365.00
Stores bank’s compounding
periods per year.
\Ð
5.13
Calculates annual effective rate.
JG\Í
12.00
Stores monthly periods.
\Ó
5.01
Calculates the equivalent
nominal percentage rate for
monthly compounding.
Table 6-27 Calculating the future value
Keys
Display
Description
:Ï
0.00
Stores present value
GVyÌ
-25.00
Stores payment
j\Ú
84.00
Stores total number of payments
É
2,519.61
Calculates the balance after 7
years.
Summary of Contents for 10bII+
Page 1: ...i HP 10bII Financial Calculator User s Guide HP Part Number NW239 90001 Edition 1 May 2010 ...
Page 3: ...iii HP 10bII Financial Calculator ...
Page 30: ...At a Glance 22 ...
Page 144: ...Statistical Calculations 136 ...
Page 183: ...Warranty Regulatory and Contact Information 9 ...
Page 184: ...Warranty Regulatory and Contact Information 10 ...