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HP 12c Owners Manual

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Page 51

  Section 3: Basic Financial Functions  51 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 51 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
You can calculate i, PV, PMT, and FV for transactions involving an odd period 
simply by entering a noninteger n. (A noninteger is a number with at least one 
nonzero digit to the right of the decimal point.) This places the calculator in 
Odd-Period mode.
*  The integer part of n (the part to the left of the decimal point)...

Page 52

52  Section 3: Basic Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 52 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example 1:
 A 36-month loan for $4,500 accrues interest at a 15% annual 
percentage rate (APR), with the payments made at the end of each month. If 
interest begins accruing on this loan on February 15, 2004 (so that the first period 
begins on March 1, 2004), calculate the monthly payment, with the odd days 
counted on the basis of a...

Page 53

  Section 3: Basic Financial Functions  53 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 53 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example 2: 
A 42-month car loan for $3,950 began accruing interest on July 19, 
2004, so that the first period began on August 1, 2004. Payments of $120 are 
made at the end of each month. Calculate the annual percentage rate (APR), using 
the actual number of odd days and simple interest for the odd period. 
Keystrokes Display...

Page 54

54  Section 3: Basic Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 54 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Amortization 
The hp 12c enables you to calculate the amounts applied toward principal and 
toward interest from a single loan payment or from several payments, and also 
tells you the remaining balance of the loan after the payments are made.
*  
To obtain an amortization schedule: 
1. Press fCLEARG to clear the financial registers....

Page 55

  Section 3: Basic Financial Functions  55 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 55 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Keystrokes Display  
573.35ÞP 
–573.35 Enters PMT (with minus sign for cash 
paid out). 
g 
–573.35 Sets payment mode to End. 
12f! 
–6,608.89Portion of first year’s payments (12 
months) applied to interest. 
~ 
–271.31 Portion of first year’s payments 
applied to principal. 
:$ 
49,728.69Balance remaining after 1 year. 
:n 
12.00...

Page 56

56  Section 3: Basic Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 56 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Keystrokes   Display   
1f! 
–552.08 Portion of first payment applied to 
interest. 
~ 
–21.27 Portion of first payment applied to 
principal. 
1f! 
–551.85 Portion of second payment applied to 
interest. 
~ 
–21.50 Portion of second payment applied to 
principal. 
:n 
2.00 Total number of payments amortized. 
If you want to generate...

Page 57

 
57 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 57 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm
  Section 4 
Additional Financial 
Functions 
Discounted Cash Flow Analysis: NPV and IRR 
The hp 12c provides functions for the two most widely-used methods of discounted 
cash flow analysis: l
 (net present value) and L
 (internal rate of return). These 
functions enable you to analyze financial problems involving cash flows (money 
paid out or received) occurring at...

Page 58

58  Section 4: Additional Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 58 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
z  If NPV is positive, the financial value of the investor’s assets would be 
increased: the investment is financially attractive. 
z  If NPV is zero, the financial value of the investor’s assets would not change: 
the investor is indifferent toward the investment. 
z  If NPV is negative, the financial value of the investor’s...

Page 59

  Section 4: Additional Financial Functions  59 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 59 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
The amounts of the subsequent cash flows are stored – in the order they occur – in 
the remaining storage registers: CF
1 thru CF9 in R1 thru R9, and CF10 thru CF19 in R.0 
thru R
.9, respectively. If there is a CF20, that amount is stored in the FV register.* 
Each cash flow (CF
1, CF2, etc.) is designated CFj, where j takes...

Page 60

60  Section 4: Additional Financial Functions 
 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 60 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm 
 
Example:
 An investor has an opportunity to buy a duplex for $80,000 and 
would like a return of at least 13%. He expects to keep the duplex 5 years and 
then sell it for $130,000; and he anticipates the cash flows shown in the diagram 
below. Calculate NPV to determine whether the investment would result in a return 
or a loss....
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