User`s guide

Time Value of Money Calculations
81
Example: Monthly Payments, Daily Compounding
Starting today, you make monthly deposits of 25 to an account paying 5% interest,
compounded daily (using a 365 day year). What will the balance be in seven years?
Step 1
Calculate the equivalent rate with monthly compounding.
Since NOM% and I/YR share the same memory, this value is ready for use in the rest of the
problem.
Step 2
Calculate the future value.
Set to Begin mode. Press \¯ if BEGIN annunciator is not displayed.
Table 6-26 Calculating the equivalent nominal percentage rate
Keys Display Description
V\Ó
5.00 Stores nominal percentage rate.
DSV\Í
365.00 Stores bank’s compounding
periods per year.
\Ð
5.13 Calculates annual effective rate.
JG\Í
12.00 S t o res mo n t hly p erio ds.
\Ó
5.01 Calculates the equivalent
nominal percentage rate for
monthly compounding.
Table 6-27 Calculating the future value
Keys Display Description
:Ï
0.00 Stores present value
GVyÌ
-25.00 Stores payment
j\Ú
84.00 Stores total number of payments
É
2,519.61 Calculates the balance after 7
years.