HP 35s User Manual

							 
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HP 35s Property Appreciation 
 
hp calculators - 3 - HP 35s Property Appreciation - Version 1.0 
5) After you press : for the last time, the value of the unknown variable will be calculated and displayed. 
6) To do another calculation with the same or changed values, go back to step 2 above. 
 
The SOLVE feature will work effectively without any initial guesses being supplied for the unknown variable with the 
exception noted above about the variable I in this equation. This equation follows the standard convention that money in 
is considered positive and money out is negative.  
The practice problems below illustrate using this equation to solve a variety of property appreciation problems.  
Practice solving property appreciation problems  
Example 1: Greg bought a house 10 years ago for $120,000. He sold it last week for $180,000. On an annual basis,  
 what was the compound rate of increase or appreciation? 
 
Solution: First, enter the time value of money equation into the HP 35s solver as described earlier in this document.   
 Then press !-and press 8or 9 to scroll through the equation list until the time value  
 of money equation is displayed. Then press:- 
-56) 
 
 The HP 35s SOLVER displays the first variable encountered in the equation as it begins its solution.  
 The value of 0.0000 is displayed below if this is the first time the time value of money equation has been  
 solved on the HP 35s calculator. If any previous equations have used a variable used in the time value of  
 money equation, they may already have been assigned a value that would be displayed on your HP 35s  
 display. If this is the first time a solution for I has been attempted, press 5%7), then follow the  
 keystrokes shown below and the solution should be found as described. If previous solutions for I have  
 been found, follow the instructions below. 
 
 Figure 1 
 
-In either RPN or algebraic mode, press: &: 
-
 Figure 2 
 
-In either RPN or algebraic mode, press: %&: 
 
 Figure 3 
 
-In either RPN or algebraic mode, press: %;&&&&.: 
   
						

							 
hp calculators 
 
HP 35s Property Appreciation 
 
hp calculators - 4 - HP 35s Property Appreciation - Version 1.0 
 Figure 4 
 
-In either RPN or algebraic mode, press: %&&&&&.: (Enters F) 
   ?%&&&&:-(Enters B)  
 Figure 6 
 
Answer: When multiplied by 12 to convert to the annual appreciation rate, the answer is 5.108% 
 
Example 3: Howard bought some land 8 years ago for $800,000. He has an offer to sell it today for $1,400,000.  
 What is the annual appreciation rate reflected by this offer? 
 
Solution: First, enter the time value of money equation into the HP 35s solver as described earlier in this document.  
 
 Then press !-and press 8or 9 to scroll through the equation list until the time value  
 of money equation is displayed. Then press:-
 
-56)   
						

							 
hp calculators 
 
HP 35s Property Appreciation 
 
hp calculators - 5 - HP 35s Property Appreciation - Version 1.0 
 
 The HP 35s SOLVER displays the first variable encountered in the equation as it begins its solution.  
 These displays are not shown in the rest of this example. Follow the keystrokes shown below and the  
 solution should be found as described. 
 
 In either RPN or algebraic mode, press: &:    (Enters P) 
---;:    (Enters N) 
---%>&&&&&.: (Enters F) 
   ;&&&&&:-(Enters B)  
 Figure 7 
 
Answer: The property appreciated at a rate of 7.25%, compounded annually. 
   
						

							 
 
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HP 35s House payment qualification 
 
 
 
 
House payment qualification 
 
The Time Value of Money on the HP 35s 
 
Practice solving house payment qualification problems 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
						

							 
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HP 35s House payment qualification 
 
hp calculators - 2 - HP 35s House payment qualification - Version 1.0 
House payment qualification 
 
The payment required to pay off a house over time involves the solution of an ordinary annuity with the value of the 
payment as the unknown variable. When applying for a house loan, the lender takes the applicant’s overall debt burden 
into account. A general guideline applied is that the total debt-to-income ratio should be below 34% and that the house 
payment plus taxes and insurance should be below 27% of total income. This will determine the maximum house 
payment for which an applicant may qualify as well as the corresponding maximum loan amount. 
 
The Time Value of Money on the HP 35s 
 
To solve time value of money problems on the HP 35s, the formula below is entered into the flexible equation solver built 
into the calculator. This equation expresses the standard relationship between the variables in the time value of money 
formula. The formula uses these variables: N is the number of compounding periods; I is the periodic interest rate as a 
percentage (for example, if the annual interest rate is 15% and there are 12 payments per year, the periodic interest 
rate, i, is 15÷12=1.25%); B is the initial balance of loan or savings account; P is the periodic payment; F is the future 
value of a savings account or balance of a loan. 
 
Equation: P x 100 x ( 1 - ( 1 + I ! 100 )^ -N)  ! I + F x ( 1 + I ! 100 ) ^ -N + B 
 
To enter this equation into the calculator, press the following keys on the HP 35s: 
 
!#$%&&$4%4%()*%&&+,-
./+*)(0$4%()*%&&+,.-
/(12 
 
To verify proper entry of the equation, press 
 
34 
 
and hold down the 4-key. This will display the equation’s checksum and length. The values displayed should be a 
checksum of CEFA and a length of 41. 
 
To solve for the different variables within this equation, the 56 button is used. This key is the right shift of the 
! key. 
 
Notes for using the SOLVE function with this equation: 
 
1) If your first calculation using this formula is to solve for the interest rate I, press %57)-before beginning. 
2) Press !. If the time value of money equation is not at the top of the list, press 8or 9 to scroll through the 
list until the equation is displayed. 
3) Determine the variable for which you wish to solve and press: 
a) 56/ to calculate the number of compounding periods. 
b) 56) to calculate the periodic interest rate. Note: this will need to be multiplied by the number of 
compounding periods per year to get the annual rate. If the compounding is monthly, multiply by 12. 
c) 561 to calculate the initial balance (or Present Value) of a loan or savings account. 
d) 56# to calculate the periodic payment. 
e) 560 to calculate the future value of a loan or savings account. 
4) When prompted, enter a value for each of the variables in the equation as you are prompted and press :. The 
solver will display the variables’ existing value. If this is to be kept, do not enter any value but press : to   
						

							 
hp calculators 
 
HP 35s House payment qualification 
 
hp calculators - 3 - HP 35s House payment qualification - Version 1.0 
continue. If the value is to be changed, enter the changed value and press :. If a variable had a value in a 
previous calculation but is not involved in this calculation (as might happen to the variable P (payment) when solving 
a compound interest problem right after solving an annuity problem), enter a zero for the value and press :. 
5) After you press : for the last time, the value of the unknown variable will be calculated and displayed. 
6) To do another calculation with the same or changed values, go back to step 2 above. 
 
The SOLVE feature will work effectively without any initial guesses being supplied for the unknown variable with the 
exception noted above about the variable I in this equation. This equation follows the standard convention that money in 
is considered positive and money out is negative. 
 
The practice problems below illustrate using this equation to solve a variety of problems involving qualifying for a specific 
house payment. 
 
Practice solving house payment qualification problems 
 
Example 1: Richard wants to buy a house that costs $170,000 using a 30 year loan at 6% compounded monthly.  
 His annual income is $55,000. His existing monthly debt includes a car payment of $295 per month and 
 a minimum payment on his credit card of $25 per month. Property taxes are estimated at $1,300 per year 
 and the annual insurance premium is estimated at $450 per year. Can Richard qualify for this house loan  
 if the lender applies the 27%/34% guidelines? 
 
Solution: First, enter the time value of money equation into the HP 35s solver as described earlier in this document.  
 
 Richard’s monthly income is $55,000 divided by 12, or $4,583.33. The maximum house payment (including  
 taxes and insurance) Richard can qualify for is 27% of his monthly income, or $1,237.50. 
 
 In RPN mode, press: ;;&&&2%
						

							 
hp calculators 
 
HP 35s House payment qualification 
 
hp calculators - 4 - HP 35s House payment qualification - Version 1.0 
-
 Figure 2 
 
-In RPN mode, press: @&2%
						

							 
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HP 35s House payment qualification 
 
hp calculators - 5 - HP 35s House payment qualification - Version 1.0 
-In RPN mode, press: %%?;=&>2
						

							 
hp calculators 
 
HP 35s House payment qualification 
 
hp calculators - 6 - HP 35s House payment qualification - Version 1.0 
 
-In RPN mode, press: %B&&2%%;&(%