To convert between a nominal annual interest rate and an effective annual interest rate that is compounded continuously:
1.Press "hto get the interest conversions menu.
2.Press lfor “continuous”.
3.To convert to the effective rate, key in the nominal rate and press j, then press k.
4.To convert to the nominal rate, key in the effective rate and press k, then press j.
Values of EFF% and NOM% are shared between the PER and CONT menus. For example, an effective interest rate in CONT remains stored in EFF% when you exit the CONT menu and enter the PER menu. Pressing @cin either menu clears NOM% and EFF% in both.
ICNV
PERCONT
NOM% EFF% P | NOM% EFF% |
Shared variables
between PER and CONT
Example: Converting from a Nominal to an Effective Interest Rate. You are considering opening a savings account in one of three banks. Which bank has the most favorable interest rate?
Bank #l 6.7% annual interest, compounded quarterly. Bank #2 6.65% annual interest, compounded monthly. Bank #3 6.65% annual interest, compounded continuously.
Keys: | Display: | Description: | ||
|
| Displays ICNV menu. | ||
" |
| h | " | |
| 7E05E4<A;<= 5" | Displays PER menu. | ||
i |
| |||
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| :;0HF?@2" |
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86 6: Interest Rate Conversions
File name : | Print data : 2003/7/11 |