|
|
|
Applications
|
|
|
|
Sample Case: What annual rate of interest must be obtained in order to amass a total of $10,000 in 10 years on an investment of $6,000?
|
|
|
Solution
|
| | Enter: | | | See Displayed: | | |
|
| |
| |
|
% annual interest rate
|
|
|
|
What if the interest were compounded daily (assume 365 days per year)?
|
|
| | Enter: | | | See Displayed: | | |
|
| |
| |
|
number of periods (days) in 10 years
|
|
| |
| |
|
% daily interest rate (rounded to two decimal places)
|
|
| |
| |
|
% annual interest rate if compounded daily
|
|
|
Number of Periods for Compounded Amount
|
|
This calculation finds the number of periods required to amass a given
sum at a specified rate on a given investment. Information is entered as
follows:
|
|
 1 |
Enter rate per period, press i.
|
| |
| 2 |
Enter present value, press PV.
|
| |
| 3 |
Enter future value, press FV.
|
| |
| 4 |
Press n to obtain number of periods.
|
| |
| 5 |
If desired, enter number of periods per year, press ÷ to convert periods to years.
|
|
|
|
Sample Case: You now have $887 in a savings account in your bank
which is paying 5.4% compounded monthly. How long will it take to reach
one million dollars?
|
|
|
Solution
|
| | Enter: | | | See Displayed: | | |
|
| |
| 5.4 SAVE 12 ÷ i 887 PV 1000000 FV n | | | |
| |
|
number of months
|
|
| |
| |
|
number of years
|
|
|
Compounded Amount of Interest Earned
|
|
This calculation finds the interest earned (dollar amount), rather than rate of interest, on a fixed amount when the interest is compounded at a specified rate and
period. Information is entered as follows:
|
|
