Texas Instruments BA Real Estate - Interest Conversion Model

72 Other Financial Tools
BEAR-CH3.DOC BA Real Estate Guidebook Bob Fedorisko Revised: 08/29/96 9:19 AM Printed: 09/28/99 1:21 PM
Page 72 of 20
Key Sequence Function
# F
Enters the nominal interest rate (APR).
# G
Enters the annual effective interest rate.
# H
Enters the number of compounding
periods per year.
Note: PDS/YR is always an entered value. Attempting to
compute PDS/YR causes an error.
What would the nominal rate with quarterly compounding
have to be to yield an annual effective rate of 16%?
Steps Keystrokes Display
Enter desired
effective rate.
16
#
G
EFF = 16.00
Enter periods per
year.
4
#
H
PDS = 4.00
Compute nominal
rate.
$
#
F
NOM= 15.12
Convert a 15% nominal interest rate with quarterly
compounding to the equivalent annual effective interest
rate.
Steps Keystrokes Display
Enter nominal rate.
15
#
F
NOM= 15.00
Enter periods per
year.
4
#
H
PDS = 4.00
Compute effective
rate.
$
#
G
EFF = 15.87
Interest Conversion Model
This model lets you convert between nominal (NOM)
interest rates (the compound interest rates for the
period) and annual effective (EFF) interest rates (the
rates at which you actually earn or pay).
Values Used by
the Model
Examples