HP 12 C simple interest calcuation



#2

Hi all,

I am new to this forum. Recently, I am excited by the HP 15C limited edition and trying to recall the memory of using my Singapore version of HP 12C as well.

Back to the subject, I want to calculate the principal which will accumulate to $10,000 at simple rate 7% p.a. over two years.

FV = 10,000
i = 7
n =2

The PV is calculated as -8,734.39.

As you may know, this is not correct given the formula PV*(1+2*0.07)=10,000. The correct PV should be 8,771.93

I figure out that it is the default compound interest calculation in HP 12C.

My question is that is there a way to make HP 12C use simple interest method to work out the PV? I understand there is a key STO EEX for old period calculation but it seems that is not useful here.

I would appreciate your assistance. Many thanks.

Sam


#3

Hello Sam,

the formula used by HP 12C accumulates the interest:

PV*(1+0.07)^2 = 10,000

So you get PV = 10,000/1.07^2 = 8734,39. That is exactly what the calc you told.

The situation you calculate is different.

greetings peacecalc


#4

Hi peacecalc,

Thanks so much for your assistance. I did not expect to get it so quick.

I understand what you said is right that I told the HP 12C to calculate like this.

However, this is because i do not know how to tell the calculator to work the PV out in a simple interest calculation.

The denominator 1.07^2 is the compound interest method, i.e., (1+0.07)*(1+0.07).

But I like to calculate this in the simple interest method which should be:

PV*(1+0.07*2)=10,000

Perhaps I should not use the financial register to work this out. A simple formula below is ok

10,000 enter
0.07 enter
2
x
1
+
/


Best regards,
sam


#5

Quote:
Perhaps I should not use the financial register to work this out.
Well, although TVM calculators are usually not used for 'simple' compoundings (that's just _too_ simple ;-)), you _can_ do it if you really want:

You only need to always set n=1 and enter n*i for i, that's all.

Franz

#6

Hi Sam,

one can still use the financial registers for a simple interest calculation.
You just need to use a "total interest rate" by multiplying the yearly interest rate by the number of years and then use n = 1:

10,000 FV
0.07 ENTER
2 x i
1 n
PV

This should give you PV = -8,771.93 as requested.

Kind regards,
Thomas


#7

Thanks for all. The method n=1 and treatment of i is useful although it is a bit odd.

Sam


#8

Quote:
The method n=1 and treatment of i is useful although it is a bit odd.

No, it's not odd at all. Odd is using a TVM calculator for a problem with a simple (i.e. not compounded) interest rate. ;-)

Franz


Possibly Related Threads...
Thread Author Replies Views Last Post
  Simple Tetris. free for you to improve on cyrille de Brébisson 3 273 11-20-2013, 05:43 PM
Last Post: Erwin Ried
  [HP-Prime] Simple Game (Bugs) CompSystems 1 185 11-01-2013, 10:18 AM
Last Post: Han
  Simple Math Question Namir 2 172 08-09-2013, 06:13 PM
Last Post: Eddie W. Shore
  HP-42S with Electroluminescent screen and simple I/O port Jose Poyan 8 404 03-27-2013, 07:11 PM
Last Post: Jose Poyan
  Simple sample programs for the HP-41CX? Tom Lewis 5 249 03-25-2013, 07:11 PM
Last Post: Allen
  Simple? programming question [WP34S] Shawn Gibson 3 222 03-15-2013, 11:56 AM
Last Post: Didier Lachieze
  Article of interest Victor Quiros 0 113 03-09-2013, 03:56 PM
Last Post: Victor Quiros
  Good (simple?) calculation for benchmarking? Jedidiah Smith 28 1,095 03-01-2013, 05:13 PM
Last Post: Harald
  SpeedUI: Version 12.05 Holiday Edition released:-) Raymond Del Tondo 3 212 12-30-2012, 02:18 AM
Last Post: Han
  What are the most popular functions? (Poll until 18.12.) Walter B 62 1,165 12-18-2012, 08:18 AM
Last Post: Walter B

Forum Jump: