|
|
Applications
|
Investments
|
The following applications use the financial keys pressed in left to
right order to obtain solutions. Some of the applications use
interactive and basic keys also. As in
ordinary tables, the number of years and interest rate must be
converted to reflect the number of compounding periods if different from
those specified. When converting years to
periods, multiply the years by the number of compounding periods per
year, and load the result by pressing  n. When converting an interest rate to its periodic equivalent, divide
the rate by the number of compounding periods per year and load the result by pressing i. Then proceed with the calculation.
|
|
Compounded Amounts
|
Future Value of Compounded Amount
|
|
This calculation finds the future value of an amount compounded at a
certain interest rate over a specified number of periods. Information is
entered as follows:
|
|
| 1 |
Enter number of time periods, press n.
|
| |
| 2 |
Enter rate per period, press i.
|
| |
| 3 |
Enter principal (present value), press PV.
|
| |
| 4 |
Press FV to obtain the future value.
|
|
|
|
Sample Case 1: What is the future value of $500 invested at 6% for 7 years if interest is compounded annually?
|
|
|
Solution
|
| | Enter: | | | See Displayed: | | |
|
| |
| |
|
value in 7 years compounded annually
|
|
|
|
Sample Case 2: What is the future value of the same $500 invested
at the same rate (6%) for the same number of years (7) if compounded
quarterly?
The necessary intermediate calculations can be done in your head or as
follows on the HP-80:
|
|
