327
n
PMT = –
PV + FV
PMT
n = –
PV + FV
•A deposit is indicated by a plus sign (+), while a withdrawal is indicated by a
minus sign (–).
uu
uu
uConverting between the nominal interest rate and effective
interest rate
The nominal interest rate (I% value input by user) is converted to an effective
interest rate (I%') when the number of installments per year (P/Y) is different from
the number of compound interest calculation periods (C/Y). This conversion is
required for installment savings accounts, loan repayments, etc.
I%' =
I%
(1+ ) –1
[C / Y ]
[P / Y ]
100 × [C / Y ]
{ }
×100
P/Y :installment
periods per year
C/Y: compounding
periods per year
When calculating n, PV, PMT, FV
The following calculation is performed after conversion from the nominal interest
rate to the effective interest rate, and the result is used for all subsequent
calculations.
i = I%'÷100
When calculating I%
After I% is obtained, the following calculation is performed to convert to I%'.
I%' =
I%
(1+ ) –1
[C / Y ]
[P / Y ]
100
{ }
×[C / Y ]×100
P/Y :installment
periods per year
C/Y: compounding
periods per year
The value of I%' is returned as the result of the I% calculation.
Press 2 (CMPD) in the Financial 1 screen to display the input screen for
compound interest calculation.
n ..................... number of compound periods
I% ................... annual interest rate
PV .................. present value (loan amount in case of loan; principal in case
of savings)
Compound Interest Calculations 19 - 3
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