CHAPTER 3. FINANCIAL CALCULATOR MODE
By manipulating
S = P (1 + rt)andP = S (1 − dt)
we get
r =
d
1 − dt
and
t =
1 −
d
r
÷ d.
Substituting the values, we get
t =
1 −
0,1025
0,1176
÷ 0,1025
=1,25.
The time under consideration is 1,25 years, that is, 15 months.
Key in as
( 1 − 0.1025 ÷ 0.1176 ) ÷ 0.1025 =
The answer is 1,25, that is, 15 months.
3.2.3 Compound interest
S = P
1+
j
m
m
tm
or S = P (1 + r)
t
We use our financial keys to do the calculations because there is only one exponent in the
formula:
S = P (1 + r)
t
NB: The interest rate must be entered into the calculator as a percentage and
NOT as a decimal because the calculator has been preprogrammed to automat-
ically divide the interest rate by a hundred. Remember that it is convention to
enter either the present value or future value as a negative amount.
• Calculate the future value if R5 000 is invested for five years at 15% per year com-
pounded monthly.
24
To Next Page
Loading...
