Sharp EL-738 operation manual Compound interest, Cash ﬂow diagrams

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Compound interest

This calculator assumes interest is compounded periodically in ﬁnancial calculations (compound interest). Compound inter- est accumulates at a predeﬁned rate on a periodic basis. For example, money deposited in a passbook saving account at

a bank accumulates a certain amount of interest each month, increasing the account balance. The amount of interest received each month depends on the balance of the account during that month, including interest added in previous months. Interest earns interest, which is why it is called compound interest.

It is important to know the compounding period of a loan or investment before starting, because the whole calculation is based on it. The compounding period is speciﬁed or assumed (usually monthly).

Cash ﬂow diagrams

The direction of arrows indicates the direction of cash movement (inﬂow and outﬂow) with time. This manual uses the following cash ﬂow diagrams to describe cash inﬂows and outﬂows.

		Present
Inflow (+)		value (PV)
						Time
						Time
Cash
flow								. . . . . .

			Payment (PMT)
Outflow (–)										Future
										value (FV)

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Contents EL-738 Page Contents Introduction Operational NotesKey Notations in This Manual Using the .andKeys Resetting the calculator Resetting the Calculator In Case of DifﬁcultyPreparing to Use the Calculator Calculator layout Calculator and Display LayoutKey operation keys Display layout 2ndFSET UP Menu Selecting the display notation and number of decimal places000 33333330003 Selecting the angular unit seeOperating Modes Selecting a modeOperations available in each mode Selecting the date format see9000 14000343 Basic Calculations⋅ ⋅ Delete keyCursor keys Editing and Correcting an EntryMemory clear key Playback function500 ErrorsMemory use in each mode for memory calculations 192Last answer memory ANS Temporary memories A-H, X-ZIndependent memory M TVM variablesMemory calculations Statistical variablesExample Key operation General Information Financial calculationsVariables used in ﬁnancial calculations Variables shared among calculationsTVM variables N, I/Y, PV, PMT, FV Basic variable operationsListed ﬁnancial variables ENT and Comp symbols Category Display symbols DescriptionsCash ﬂow diagrams Compound interestTVM Time Value of Money Solver Setting the payment period payment dueVariable Corresponding Description Default Variable key Variables used in the TVM solverBasic examples for the TVM solver Calculating basic loan interest5600000 120024000 44000125586 4008000 Calculating basic loan paymentsFV= 360020000 Calculating future value1000000 1002000 376889Annuity due BGN Specifying payments dueOrdinary annuity END Ordinary annuity360 180030000000 162457014500 240029950 299500627995 3400150000 Calculating down payment and amount to borrow550 3000090000 14655892Amortization Calculations Variable Description Default valueVariables used in amortization 61656 8895148600 104852203428 170048275524 3844574800 1724476Single cash ﬂows Discounted Cash Flow AnalysisEntering cash ﬂow data Repeated cash ﬂows300 000*2200 Conﬁrming and editing dataDeleting data 2500000Editing data Inserting dataVariables used in discounted cash ﬂow analysis 3000000600000 NPV and IRRTo obtain NPV Procedure Key operation Display Bring up the initial disPlay in Normal mode To obtain IRR2314 Calculating the present value of variable cash ﬂows662752 Bond Calculations Setting the day-count methodVariables used in bond calculations To obtain bond price Price PV To obtain yield to maturity Yield I/Y15-2023 65010000 720728 9250Entering dates Variables used in depreciation calculations Setting the depreciation methodDepreciation Calculations Key operation DescriptionPage 5000000 3000Calculating straight-line depreciation To change APR to EFF 1956Conversion between APR and EFF To change EFF to APRDay and Date Calculations Variables used in day and date calculationsCalculating number of days 10-200922800 Answer 228 daysPercent Change/Compound Interest Cal- culations Procedure Key operation Display Move to the last dateCalculate 5467 750000011600000 800000Cost/Sell/Margin/Markup Calculations 980000113 Variables used in cost/sell/margin/markup calcula- tions88842 455609500 Determining selling priceVariables used in breakeven calculations Breakeven CalculationsCalculating the breakeven point 12000 15000007580 33937Constant Calculations Chain Calculations5000 087071 4500Random dice Random FunctionsRandom numbers Random coinModify Function 532Random integer For a two-variable data set x value y value J Entering statistical dataFor a single-variable data set Key operation Sub-mode DisplayEntering statistical data 1000 2000 Linear regression calculations Statistical Calculations and VariablesSingle-variable statistical calculations Quadratic regression calculationVariables Content 17857 53000Single-variable statistical calculation Linear regression calculation Quadratic regression calculation Amortization calculations Financial Calculation FormulasTVM solver Discounted cash ﬂow analysisBond calculations Conversion between APR and EFF Depreciation calculationsDay and date calculations Cost/Sell/Margin/Markup calculations Statistical Calcula- tion FormulasBreakeven calculations Syntax error Error Errors and Calculation RangesError codes and error types Calculation error ErrorDisplay error Error Equation too long ErrorNo solution Error Input value error ErrorCalculation ranges of functions Function Calculation rangeInteger Battery Replacement When to replace the batteryAutomatic power-off function Replacement procedurePriority Levels in Calculations For more information about business/ ﬁnancial calculators SpeciﬁcationsKey operation and calculation priority Index Formulas, 72-75 FV, 18, 22, 72 GRAD, 8, 9, 61 Memo