User manual - Chapter 2 Financial Calculation (TVM)

20010101

uConverting between the nominal interest rate and effective interest rate

The nominal interest rate (I% value input by user) is converted to an effective interest rate

(I%') for installment loans where the number of installments per year is different from the

number of compound interest calculation periods.

I%' =

(1+ ) –1

[C / Y ]

[P / Y ]

100 × [C / Y ]

{ }

×100

The following calculation is performed after conversion from the nominal interest rate to the

effective interest rate, and the result is used for all subsequent calculations.

i = I%'÷100

Press 4(AMT) from the Financial 1 screen to display the following input screen for interest

rate conversion.

4(AMT)

PM1 ............................. first installment of installments 1 through n

PM2 ............................. second installment of installments 1 through n

.................................. installments

I% ............................... interest rate

PV ............................... principal

PMT ............................ payment for each installment

FV ............................... balance following final installment

P/Y .............................. installments per year

C/Y .............................. compoundings per year

2-5-2

Amortization