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Applications
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 1 |
Enter number of periods, press n.
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| 2 |
Enter interest rate, press i.
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| 3 |
Enter principal (present value), press STO PV.
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Press FV to obtain future value.
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Press RCL – to obtain dollar amount of interest.
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Sample Case: What would be the net amount and interest earned on $500 at 5 % for 2 years if interest is compounded quarterly?
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Solution
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number of periods (quarters) in 2 years
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% interest rate per quarter
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net amount (future value)
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interest earned
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Nominal Rate Converted to Effective Annual Rate
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This calculation finds the effective annual interest rate when the number of periods per year and the nominal (stated) annual interest rate are known. Information is entered as follows:
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| 1 |
Enter number of periods per year, press STO n.
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| 2 |
Enter nominal rate, press RCL ÷ i.
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| 3 |
Enter 100, press STO PV FV.
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| 4 |
Press RCL – to obtain effective annual rate.
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Sample Case: What is the effective annual rate of interest if the nominal (annual) rate of 12% is compounded quarterly?
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Solution
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4 STO n 12 RCL ÷ i
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% effective annual interest rate
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Effective Annual Rate Converted to Nominal Rate
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This calculation finds the nominal (annual) rate of interest when the number of periods per year and the effective annual interest rate are known. Information is
entered as follows:
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