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P.6
19-6 Conversion between Percentage Interest
Rate and Effective Interest Rate
Press 5 (CNVT) in the Financial 1 screen to display the following input screen
for interest rate conversion.
n ...................... number of compoundings
I% ................... interest rate
•{
''
''
'
EFF}/{
''
''
'
APR} ... {annual percentage rate to effective interest rate}/{effective
interest rate to annual percentage rate} conversion
kk
kk
k Converting the Annual Percentage Rate (APR) to the
Effective Interest Rate (EFF)
EFF =
n
APR/100
1+
–1 × 100
n
Example Calculate (to two decimal places) the effective interest rate for
an account paying an interest rate of 12%, compounded
quarterly.
In the set up screen, specify “Fix2” for Display and then press J.
Perform the following key operations from the input screen.
ew(n = 4)
bcw(I% = 12%)
1(
'
EFF)
• The obtained value is assigned to I%.
kk
kk
k Converting the Effective Interest Rate (EFF) to the Annual
Percentage Rate (APR)
APR =
100
EFF
1+
–1 × n ×100
1
n
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