202 Appendix F: United Kingdom CalculationsAnnual Percentage Rate (APR) Calculations

In the United Kingdom, the calculation of the Annual Percentage Rate of Charge (APR) in accordance with the United Kingdom Consumer Credit Act (1974) differs from the calculation of the APR in the United States. Unlike the practice in the United States, where the APR can be calculated by multiplying the periodic interest rate by the number of periods per year, in the United Kingdom the APR is calculated by converting the periodic interest rate to the “effective annual rate,” then truncating the result to one decimal place. With the periodic interest rate in the display and in the i register, the effective annual rate can be calculated by keying in the number of compounding periods per year, pressing w, then proceeding with step 4 of the procedure given on page 160 for converting a nominal rate to an effective rate.

Bond Calculations

Solutions for the price and yield to maturity of United Kingdom bonds are not included in this handbook. Actual practice differs according to the type of bond; variations such as cumulative and ex-dividend pricing, simple or compound interest discounting, etc., may be encountered.

Application Notes covering such situations may be available in the United Kingdom; check with your local authorized Hewlett-Packard dealer.

File name: hp 12c_user's guide_English_HDPMBF12E44

Page: 202 of 209

Printered Date: 2005/7/29

Dimension: 14.8 cm x 21 cm