86 6: Interest Rate Conversions
To convert between a nominal annual interest rate and an effective
annual interest rate that is compounded
continuously
:
1. Press "
h
to get the interest conversions menu.
2. Press l
for “continuous”.
3. To convert to the effective rate, key in the nominal rate and press
j
,
then press
k
.
4. To convert to the nominal rate, key in the effective rate and press
k
,
then press
j
.
Values of EFF% and NOM% are shared between the PER and CONT
menus. For example, an effective interest rate in CONT remains stored
in EFF% when you exit the CONT menu and enter the PER menu.
Pressing
@c
in either menu clears NOM% and EFF% in both.
NOM% NOM%
PER
ICNV
EFF% EFF%
CONT
P
Shared variables
between PER and CONT
Example: Converting from a Nominal to an Effective Interest Rate.
You are considering opening a savings account in one of three banks.
Which bank has the most favorable interest rate?
Bank #l 6.7% annual interest, compounded quarterly.
Bank #2 6.65% annual interest, compounded monthly.
Bank #3 6.65% annual interest, compounded continuously.
Keys: Display: Description:
"
h
" Displays ICNV menu.
i
7E05E4<A;<= 5"
:;0HF?@2"
Displays PER menu.
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