HP 10bII - Page 74

To adjust an interest rate when the compounding period differs from the
payment period complete the following steps:
1, Enter the nominal rate and press QE. Enter the number of
compounding periods in a year and press БЖ). Solve for the effective
rate by pressing QE.
2. Enter the number of payment periods іп a year and press Б.
Solve for the adjusted nominal rate by pressing Q@9).
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,
Keys: Display: Description:
Ge» 5.00 Stores nominal percentage
rate.
[ејојејаа сг 365.00 Stores bank’s compounding
periods per year.
Qe
5.13
Calculates
annual
effective
rate.
[ее
ааст]
12.00
Stores
monthly
periods.
Qe»
5.01
Calculates
equivalent
nominal
percentage
rate
for
monthly
compounding,
Since NOM% and I/YR share the same register, this value is ready for use
in the rest of the problem.
Step 2. Calculate the future value.
Set to Begin mode. Press БЖ if annunciator is not displayed.
0.00 Stores present value.
Сое? -25.00 Stores payment.
Ges 84.00 Stores total number of
payments.
C»
2,519.61
Calculates
balance
after
7
years.
74 5:Time Value of Money Calculations