Table 13-4

Calculating the cost without the cash discount

 

 

 

 

 

Keys

 

Display

Description

 

 

 

GPDS:PJ

 

equation.

 

 

72,000.00

Calculates numerator in

::a
\q\qJ::AG\n

98.00Parentheses force order of calculation.

P\qD:A

36.73

Calculates, as an annual

 

percentage rate, cost of not

J:4

taking discount.

 

 

 

Loans and Mortgages

Simple Annual Interest

Example

Your good friend needs a loan to start his latest enterprise and has asked you to lend him 450 for 60 days. You lend him the money at 10% simple annual interest, to be calculated on a 365-day basis. How much interest will he owe you in 60 days, and what is the total amount owed?

This equation is used for calculating simple annual interest using a 365 day year:

INTEREST =

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------LOAN AMOUNT ⋅ INTEREST% ⋅ TERM OF LOAN (IN DAYS)

 

 

365

 

Table 13-5 Calculating the total amount owed

 

 

 

 

 

 

Keys

 

Display

Description

 

 

 

YV:sPJ:§

0.10

Stores interest.

 

 

 

 

 

PS:aDSV4

7.40

Calculates interest owed.

 

 

 

 

 

 

1p4

 

 

owed.

 

 

457.40

Calculates the total amount

Continuous Compounding

The equation for calculating an effective rate for continuous compounding is:

EFF% = (e(NOM% ⎟ 100) – 1) ⋅ 100

Additional Examples 139