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HP 12c Owners Manual

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Page 151

 
151 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 151 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
  Section 14 
Leasing 
Advance Payments 
Situations may exist where payments are made in advance (leasing is a good 
example). These agreements call for extra payments to be made when the 
transaction is closed. 
This first procedure finds the periodic payment amount necessary to achieve a 
desired yield when a number of payments are made in advance. And, given the...

Page 152

152 Section 14: Leasing 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 152 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
If solving for the payment amount will be done repetitively, key in the following hp 
12c program. 
KEYSTROKES DISPLAY  KEYSTROKES DISPLAY 
fs  1 09-     1 
fCLEARÎ 00- Þ 10-    16 
g 01-  43   8P 11-    14 
fCLEARG 02-  42  34$ 12-    13 
:0 03-  45   0:1 13-  45   1 
:1 04-  45   1+ 14-    40 
- 05-    30:3 15-  45   3 
n 06-    11~ 16-    34 
:2...

Page 153

 Section 14: Leasing 153 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 153 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example 2:
 Using the preceding program, solve for the monthly payment using 
the information given in example 1. Then change the yearly interest to 15% and 
solve for the new payment amount. 
Keystrokes Display  
12?0 
12.00 Duration of lease. 
3?1 
3.00 Number of advance payments. 
10\12z 
  
?2 
0.83 Periodic interest rate. 
750?3t 
64.45 Monthly...

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154 Section 14: Leasing 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 154 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Solving for Yield 
To calculate the periodic yield, information is entered as follows: 
1. Press g and fCLEARG. 
2.  Key in the total number of payments in the lease then press \. 
3.  Key in the total number of payments made in advance then press   
?0-n. 
4.  Key in the periodic payment to be received then press P. 
5.  Key in the total amount of...

Page 155

 Section 14: Leasing 155 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 155 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
If solving for yield will be done repetitively, key in the following hp 12c program: 
KEYSTROKES DISPLAY  KEYSTROKES DISPLAY 
fs  :3 09-  45   3 
fCLEARÎ 00- Þ 10-    16 
g 01-  43   8:1 11-  45   1 
fCLEARG 02-  42  34:P 12-  45  14 
:0 03-  45   0§ 13-    20 
:1 04-  45   1+ 14-    40 
- 05-    30$ 15-    13 
n 06-    11¼ 16-    12 
:2 07-  45...

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156 Section 14: Leasing 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 156 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Keystrokes Display  
25000?3t 
17.33 Annual yield (as a percentage). 
625?2t 
19.48 Annual yield (as a percentage) 
when PMT is increased $25. 
Advance Payments With Residual 
Situations may arise where a transaction has advance payments and a residual 
value (salvage value) at the end of the normal term. 
Solving for Payment 
The following program...

Page 157

 Section 14: Leasing 157 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 157 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
REGISTERS 
n: Used.  i: Interest  PV: Used  PMT: –1. 
FV: Residual 
R0: # Pmts (n)  R1: Interest.  R2: Loan. 
R3: Residual  R4: # Adv. Pmt.  R5: Used  R6–R.6: Unused 
 
1.  Key in the program. 
2.  Key in the total number of payments then press ?0. 
3.  Key in or calculate the periodic interest rate then press ?1. 
4.  Key in the loan amount then...

Page 158

158 Section 14: Leasing 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 158 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example 2:
 Using the information from example 1, what would the monthly 
payments be if the lessor desired a yield of 18% annually?
 
Keystrokes Display  
 
487.29 From previous example. 
18\12z 
1.50 Monthly interest rate. 
?1t 
520.81 Monthly payment received by lessor. 
Solving For Yield 
Solving for yield is essentially the same as solving for...

Page 159

 Section 14: Leasing 159 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 159 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Keystrokes   Display   
§=gJ 
–4,710.00 Net amount of cash advanced. 
145gK34ga 
34.00 Thirty-four cash flows of $145.00. 
0gK 
0.00 Thirty-fifth cash flow. 
1500gK 
1,500.00 Thirty-sixth cash flow. 
fL12§ 
18.10 Annual yield to lessor.  

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File name: hp 12c_users guide_English_HDPMBF12E44  Page: 160 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
  Section 15 
Savings 
Nominal Rate Converted to Effective Rate 
Given a nominal interest rate and the number of compounding periods per year, 
this keystroke procedure computes the effective annual interest rate. 
1. Press g and fCLEARG. 
2.  Key in the annual nominal rate as a percentage, then press \. 
3.  Key in the number of compounding periods per year, then press...
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