To convert between a nominal annual interest rate and an effective annual interest rate that is compounded continuously:
1.Press to get the interest conversions menu.
2.Press for “continuous”.
3.To convert to the effective rate, key in the nominal rate and press , then press .
4.To convert to the nominal rate, key in the effective rate and press , then press .
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 #1 6.7% annual interest, compounded quarterly. Bank #2 6.65% annual interest, compounded monthly. Bank #3 6.65% annual interest, compounded continuously.
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| Displays ICNV menu. | ||
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| Displays PER menu. | ||
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86 6: Interest Rate Conversions
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