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HP F1902-90001 manual WkhVdphYdoxhvDjdlq, DqgEdodqfh, 68 5 Time Value of Money Calculations

Models: F1902-90001

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68 5: Time Value of Money Calculations

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$HP F1902-90001 manual WkhVdphYdoxhvDjdlq, DqgEdodqfh, WkhVwduwlqjDqgHqglqjSd\PhqwvWkdwZlooEhDpruwlhg$

Contents

Hp 10BII financial calculator Edition HP part number F1902-90001Edition May Welcome to the HP 10BII Hewlett-Packard QualityZRUOGZLGHVHUYLFH FDOFXODWRUFeatures $ODUJHFKDUDFWHUGLVSOD\VFKHGXOHV FDOFXODWLRQVContents 33 3HUFHQW.H\ 53 8VLQJWKH790$SSOLFDWLRQ 54 &OHDULQJ79073 &RPSRXQGLQJDQG3D\PHQW3HULRGV’LIIHU 84 $XWRPDWLF6WRUDJHRI,555DQG139101 $QQXDO3HUFHQWDJH5DWHIRUD/RDQLWKHHV 123 &RQVXPHU7UDQVDFWLRQVLQWKH8QLWHG.LQJGRP129 ,555&DOFXODWLRQV 130 +DOWLQJDQG5HVWDUWLQJ,555QWHULQJD*XHVVIRU,555 132 7LPH9DOXHRI0RQH\790Page At a Glance Basics-At a GlanceFRQFHSWVSUHVHQWHGLQWKLVVHFWLRQ 7XUQVFDOFXODWRURQPercentages-At a Glance 7D 3HUFHQWRVW 3ULFH $GGWRMemory Keys-At a Glance… 6WRUHVDFRQVWDQWRSHUDWLRQ6WRUHV·ïµDVD OHDUVGLVSOD\Time Value of Money TVM-At a Glance… 3D\PHQW1XPEHURISD\PHQWVSHU\HDUPRGH 6HWVSD\PHQWVSHU\HDUTVM What if…-At a Glance… DOFXODWHVDPRXQW\RXFDQERUURZ +RZPXFKFDQ\RXERUURZDWDLQWHUHVWUDWHAmortization-At a Glance… DQGBALDQQXQFLDWRUVUHVSHFWLYHO\’LVSOD\VSULQFLSDO ’LVSOD\VEDODQFHInterest Rate Conversion-At a Glance… WKHQVROYHIRUWKHXQNQRZQUDWH3HULRGVSHU\HDU FRPSRXQGHGPRQWKO\IRR/YR and NPV-At a Glance… 1HWSUHVHQWYDOXHQWHUVQXPEHURIFRQVHF QWHUV ,5Statistics-At a Glance… OHDUVWDWLVWLFDOUHJLVWHUV55.68 10.00 27.50 420.00 Keyboard Map Key memory Backspace Accumulate statistical data Cash flowsPage Power On and Off Adjusting the Display ContrastGetting Started Simple Arithmetic CalculationsKDQJHVWKHVLJQRI DOFXODWHVUHVXOWUnderstanding the Display and Keyboard CursorClearing the Calculator Clearing MemoryAnnunciators 26 1 Getting StartedShift Key Statistics KeyEHHQSHUIRUPHG DJDLQMath Functions Input KeySwap Key $GGVDQGDisplay Format of Numbers QWHUV QXPEHUDOFXODWHVWKHSHUFHQW FKDQJHSpecifying Displayed Decimal Places Scientific NotationDIWHUWKHGHFLPDOSRLQW SODFHVDisplaying the Full Precision of Numbers Interchanging the Period and CommaGHFLPDOSRLQWLVQRWVKRZQ ’LYLGHVMessages Rounding NumbersFinding a Percent Business PercentagesPercent Key Adding or Subtracting a Percent Percent ChangeMargin and Markup Calculations Margin CalculationsMarkup on Cost Calculations GLVSOD\HGUsing Margin and Markup Together 6WRUHVPDUNXSDOFXODWHVWKHSULFHRQ FDVHRIVRXSUsing Stored Numbers in Calculations Using ConstantsNumber Storage and Arithmetic RSHUDWLRQVFRQVWDQW VWDQWUsing the M Register UHJLVWHU5HFDOOVFRQWHQWVRIWKH UHJLVWHUUsing Numbered Registers IROORZLQJ5HFDOOV5 RPSOHWHVILUVWDoing Arithmetic Inside Registers 0XOWLSOLHVLQ5 E\DQGVWRUHVUHVXOW LQ5 Doing Arithmetic Power Operator Using Parentheses in CalculationsFDOFXODWH ⋅ DOFXODWHV† DOFXODWHV 0XOWLSOLHVWKHUHVXOWE\ 1RFDOFXODWLRQ\HWPicturing Financial Problems How to approach a Financial ProblemPicturing Financial Problems WRVROYLQJDILQDQFLDOSUREOHP46 4 Picturing Financial Problems Signs of Cash FlowsDERXWWKHWUDQVDFWLRQ 000.00Periods and Cash Flows Simple and Compound InterestSimple Interest NQRZQEHIRUH\RXFDQEHJLQFDOFXODWLQJ48 4 Picturing Financial Problems Compound InterestDUHEDVHGRQFRPSRXQGLQWHUHVW 005.00 010.03 015.08 020.16 025.26Interest Rates Two Types of Financial ProblemsRecognizing a TVM Problem PV = 150,000.00 = 360 30357 358 359 PMT = -1,041.40 FV = -10,000.00Recognizing a Cash Flow Problem 000.00Page Using the TVM Application Time Value of Money Calculations7RXVH790VHYHUDOSUHUHTXLVLWHVPXVWEHPHW 3D\PHQWVPXVWRFFXUDWUHJXODULQWHUYDOVClearing TVM DOFXODWHVDQDPRUWLDWLRQWDEOHRFFXUVDWWKHEHJLQQLQJRIWKHILUVWSHULRG RFFXUDWWKHEHJLQQLQJRUHQGRIHDFKSHULRGBegin and End Modes Loan Calculations6WRUHVDPRXQW ERUURZHG6WRUHVWKHDPRXQWOHIW WRSD\DIWHU\HDUVPV = ? YR = 7.5% = 30 356 357 358 359 360 PMT = End Mode SXUFKDVHSULFH6HWVSHULRGVSHU\HDU 6WRUHVLQWHUHVWUDWH6ROYHWKLVSUREOHPXVLQJWZRVWHSV 6WRUHVORDQEDODQFHDIWHU\HDUV 6WRUHVRULJLQDOORDQWKHQVWRUHV PV = 172,500.00 YR = 8.8% = 4Savings Calculations OHDUVDOOUHJLVWHUVILUVWGHSRVLW WRDFFXPXODWHPMT = PV = -2,000.00 FV= ? YR = 6.3%YR = FV = YR = 7% = 600 50 PV = -400,000.00 Begin Mode SHU\HDU6WRUHVQXPEHURI GHSRVLWVLease Calculations ZLWKGUDZDOVWZRFRPPRQOHDVHFDOFXODWLRQV WKHEHJLQQLQJRIHDFKFV = 7,500.00 PMT = ? YR = 10% PV = -13,500.00 Begin Mode \LHOGYDOXH LQPRQWKVPMT = -2,400.00 48th payment due up front FV = -15,000.00 Begin Mode PV = ?7KLVVROXWLRQUHTXLUHVIRXUVWHSV SD\PHQWV DOFXODWHVSUHVHQWYDOXHRIPRQWKO\ $GGVDGGLWLRQDOPrincipal $ Interest $ Time AmortizationPayment $ WKHVDPHYDOXHVDJDLQ DQGEDODQFH\WKHVWDUWLQJDQGHQGLQJSD\PHQWVWKDWZLOOEHDPRUWLHG 68 5 Time Value of Money Calculations579.82’LVSOD\VWKH35,1 13,894.66’LVSOD\VWKH,17178,420.18’LVSOD\VWKH%$/ HQGLQJSHULRGV$PRUWLHWKHVHFRQG\HDU ’LVSOD\V35,1DQGWKH6HWVSD\PHQWVSHU\HDU 70 5 Time Value of Money CalculationsSULQFLSDOSD\PHQW ’LVSOD\V,17DQGWKHLQWHU HVWInterest Rate Conversions Investments With Different Compounding PeriodsSHULRGGLIIHU IDYRUDEOHLQWHUHVWUDWHCompounding and Payment Periods Differ 6WRUHVQRPLQDOUDWH 6WRUHVTXDUWHUO\ FRPSRXQGLQJSHULRGV6WRUHVQRPLQDOUDWH 6WRUHVPRQWKO\FRP SRXQGLQJSHULRGV 6WRUHVQRPLQDOUDWHStep . &DOFXODWHWKHIXWXUHYD XH 6WRUHVSD\PHQW6WRUHVWRWDOQXPEHURI DOFXODWHVEDODQFHDIWHUHow to Use the Cash Flow Application Cash Flow CalculationsWKH+3%,, QWHUWKHQXPEHURISHULRGVSHU\HDUQWHUVQHWFDVKIORZ QWHUVILQDOFDVKIORZQRPLQDO\LHOG 0RQWKO\\LHOGNPV and IRR/YR Discontinuing Cash Flows Organizing Cash FlowsEntering Cash Flows IORZVXVLQJWKHIROORZLQJVWHSVEHHQHQWHUHG 3UHVV*&WRFOHDUWKHUHVLVWHUVViewing and Replacing Cash Flows JURXSDPRXQW QWHUVQXPEHURI UHSHWLWLRQVIORZJURXSDPRXQW QWHUVQXPEHURI UHSHWLWLRQV 7RYLHZDFDVKIORZSUHVVCalculating Net Present Value 7RUHSODFHDFDVKIORZDPRXQWSUHVV7KHVHVWHSVGHVFULEHKRZWRFDOFXODWH139 YR = 15% 10,000 500 OHDUVUHJLVWHUVQWHUVQXPEHURI RFFXUUHQFHV FDOFXODWHWKHQHWSUHVHQWYDOXH 82 6 Cash Flow CalculationsCalculating Internal Rate of Return 3UHVV*9SUHYLRXVHDPSOH 000 10,000 500 28,000 11 13 15 17 IRR/YR = ? 19 21 23Automatic Storage of IRR/YR and NPV 84 6 Cash Flow CalculationsStatistical Calculations Clearing Statistical DataHLJKWHGPHDQ Statistical CalculationsTwo-Variable Statistics and Weighted Mean Entering Statistical DataOne-Variable Statistics VWDWLVWLFDOUHJLVWHUVCorrecting Statistical Data Summary of Statistical CalculationsCorrecting One-Variable Data Correcting Two-Variable DataLI\RXHQWHUHG\GDWD 6XPRIWKHYDOXHV6XPRIWKH\YDOXHV 88 7 Statistical CalculationsVTXDUH DOFXODWHVWKHURRWPHDQLinear Regression and Estimation 82.75 ’LVSOD\VPHDQRIZHLJKWV\IROORZV 90 7 Statistical Calculations ’LVSOD\VVORSH FRHIILFLHQWPLQXWHVRIDGYHUWLVLQJ 357.38VWLPDWHVVDOHVLI 783.25VWLPDWHVVDOHVLIWeighted Mean Page Setting a Sales Price Additional ExamplesBusiness Applications SURGXFWForecasting Based on History VHYHQVWLPDWHVVDOHVIRU\HDU OHDUVVWDWLVWLFVUHJLVWHUVCost of Not Taking a Cash Discount Loans and Mortgages Simple Annual InterestContinuous Compounding 17567Yield of a Discounted or Premium Mortgage PRUWJDJH QWHUVDPRXQWOHIWWRSD\DIWHU\HDUV DOFXODWHVUHJXODUAnnual Percentage Rate for a Loan With Fees 72&DOFXODWHV$35 FRQVLGHULQJIHHVLQWHUHVWD HPDGH GXHLoan With a Partial Odd First Period Automobile Loan DPRXQWGHDOHULVRIIHULQJWZRFKRLFHVIRUILQDQFLQJ UHEDWH LWKZKLFKFKRLFHGR\RXSD\OHVVIRUWKHFDUCanadian Mortgages 106 8 Additional Examples What if … TVM CalculationsIROORZV LQWHUHVWSDLGRQWKHFRQWUDFW WRSD\RIIORDQELZHHNO\SD\PHQWV 6WRUHVQHZWHUPSavings Saving for College Costs$15,000 YR = 9% Year6WRUHVDQQXDO ZLWKGUDZDO 6WRUHVQXPEHURI ZLWKGUDZDOV FV fromPrevious 142 143 144 PMT = ?Gains That Go Untaxed Until Withdrawal QHHGVWDUWLQJZLWK 110 8 Additional ExamplesVWDUWZLWK 6WRUHVDPRXQWRI DQQXDOSD\PHQW UHWLUHPHQWRILQWHUHVW LQIODWLRQUDWHValue of a Taxable Retirement Account VWDUWLQJZLWK 6WRUHVDPRXQWRI DQQXDOSD\PHQW6WRUHVDPRXQW\RXDUH DFFRXQWDWUHWLUHPHQWCash Flow Examples Wrap-Around MortgagesKHQ\RXJURXSWKHDERYHFDVKIORZV\RXOOILQGWKDW QWHUVQHWSD\PHQWIRUQHWPRQWKV WLPHVSD\PHQWRFFXUVNet Future Value FXUUHQWEDODQFHRIWKHDFFRXQWJURXS JURXSYDOXH139 116 8 Additional ExamplesAssistance, Batteries, and Service Assistance, Batteries, and ServiceAnswers to Common Questions 3UHVV*SDJH Environmental Limits KDWGRHVDQ·µLQDQXPEHUIRUHDPSOH†PHDQKDWGRHVPENDLQWKHGLVSOD\PHDQ 6WRUDJHWHPSHUDWXUH†ƒWRƒ&†ƒWRƒPower and Batteries Low Power AnnunciatorBattery Specifications Installing Batteries 5HPRYHERWKEDWWHULHV VHFWLRQDetermining if the Calculator Requires Service QVWDOOQHZEDWWHULHV HUDVHWKHPHPRU\VHHEHORZ FDVHWKHFDOFXODWRUUHTXLUHVDVHUYLFHLimited One-Year Warranty What Is CoveredWhat Is Not Covered EDWWHU\DQGEDWWHU\OHDNDJHZDUUDQWLHVIf the Calculator Requires Service Obtaining ServiceConsumer Transactions in the United Kingdom XSGDWHSURGXFWVRQFHVROGShipping Instructions Service ChargeWarranty on Service RSHUDWHWKLVHTXLSPHQW Service AgreementsRegulatory Information End-user terms and conditions Assistance, Batteries, and Service Page More About Calculations IRR/YR CalculationsPossible Outcomes of Calculating IRR/YR KHOS\RXLQWHUSUHWZKDWKDVKDSSHQHGHalting and Restarting IRR/YR Tering a Guess for IRR/YRRQHQHJDWLYHFDVKIORZ $IWHU\RXYHLQWHUUXSWHGWKHFDOFXODWLRQEffect of Using Σ- to Correct Data Range of NumbersIROORZLQJWKLVDSSHQGL WRFOHDUWKHVWDWLVWLFDOUHJLVWHUVDQGUHHQWHUWKHGDWDEquations Margin and Markup CalculationsTime Value of Money TVM AmortizationInterest Rate Conversions RUHDFKSD\PHQWDPRUWLHGWKHJURXSQXPEHURIWKHODVWJURXSRIFDVKIORZV Cash-Flow Calculations Statistics Σx =Page Messages 0HPRU\KDVEHHQHUDVHGSDJH RS\ULJKWPHVVDJH FRQGLWLRQ5XQQLQJ$FDOFXODWLRQLVLQSURFHVV UfloIndex Special KeysHJLQPRGH RUURZLQJHTXLW\ \RXWYDOXH Gldjudpv Glvfrxqw Hqwhulqj Htxdwlrqv Uhsodflqj Xqhyhq Ylhzlqj KDLQFDOFXODWLRQV Uhvwduwlqj LQHDUUHJUHVVLRQ , Rjdulwkp Zhljkwhg , 0HPRU\DWDJODQFH 3HUFHQW 5DWH Hiihfwlyh , DULWKPHWLFLQ Qxpehuhg 6LJQFKDQJLQJ Hvwlpdwlrq Uhjlvwhuv Vxppdwlrq