HP 10bII+ - Loans and Mortgages

Additional Examples
139
Loans and Mortgages
Simple Annual Interest
Example
Your good friend needs a loan to start his latest enterprise and has asked you to lend him 450
for 60 days. You lend him the money at 10% simple annual interest, to be calculated on a
365-day basis. How much interest will he owe you in 60 days, and what is the total amount
owed?
This equation is used for calculating simple annual interest using a 365 day year:
Continuous Compounding
The equation for calculating an effective rate for continuous compounding is:
Table 13-4 Calculating the cost without the cash discount
Keys Display Description
GPDS:PJ
::a
72,000.00 Calculates numerator in
equation.
\q\qJ:
:AG\n
98.00 Parentheses force order of
calculation.
P\qD:A
J:4
36.73 Calculates, as an annual
percentage rate, cost of not
taking discount.
Table 13-5 Calculating the total amount owed
Keys Display Description
YV:sPJ:§
0.10 Stores interest.
PS:aDSV4
7. 4 0 C al cu la te s in t eres t owe d.
1p4
457.40 Calculates the total amount
owed.
INTEREST
LOAN AMOUNT INTEREST%× TERM OF LOAN IN DAYS()×
365
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------=
EFF% e
NOM% 100÷()
1–()100×=