469972

HP 12c - F2230A Manual

63
Zoom out
Zoom in
Previous page
1/211
Next page
Section 4: Additional Financial Functions 63
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 63 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
Calculating Internal Rate of Return (IRR)
1. Enter the cash flows using either of the methods described above under
Calculating Net Present Value.
2. Press fL.
The calculated value of IRR appears in the display and also is automatically stored
in the i register.
Note: Remember that the L function may take a significant amount of
time to produce an answer, during which the calculator displays running.
Example:
The NPV calculated in the preceding example was positive, indicating
that the actual rate of return (that is, the IRR) was greater than the 13
1
/
2
used in the
calculation. Find the IRR.
Assuming the cash flows are still stored in the calculator, we need only press
fL
:
Keystrokes Display
fL
13.72
IRR is 13.72%.
Note that the value calculated by
L
is the periodic rate of return. If the cash flow
periods are other than years (for example, months or quarters), you can calculate
the nominal annual rate of return by multiplying the periodic IRR by the number of
periods per year.
As noted above, the calculator may take several seconds or even minutes to
produce an answer for IRR. This is because the mathematical calculations for
finding IRR are extremely complex, involving a series of iterations — that is, a
series of successive calculations. In each iteration, the calculator uses an estimate
of IRR as the interest rate in a computation of NPV. The iterations are repeated
until the computed NPV reaches about zero.
*
If you do not want to wait for the computation of IRR to be completed, press any
key. This halts the computation of IRR and displays the estimated value of IRR being
used in the current iteration.
†
You can then check how good this estimate is by
calculating NPV using this estimate: if the estimate is close to IRR, the NPV
calculated with it should be close to zero.* The values of IRR is put into the i
register at the end of each iteration. Therefore, to check how good an estimate of
IRR is after that estimate is in the display, just press
fl
.
*
In practice, because the complex mathematical calculations inside the calculator are done
with numbers rounded to 10 digits, NPV may never reach exactly zero. Nevertheless, the
interest rate that results in a very small NPV is very close to the actual IRR.
†
Provided the first iteration has been completed.
… 63 …


Need help? Post your question in this forum.

Forumrules


Report abuse

Libble takes abuse of its services very seriously. We're committed to dealing with such abuse according to the laws in your country of residence. When you submit a report, we'll investigate it and take the appropriate action. We'll get back to you only if we require additional details or have more information to share.

Product:

For example, Anti-Semitic content, racist content, or material that could result in a violent physical act.

For example, a credit card number, a personal identification number, or an unlisted home address. Note that email addresses and full names are not considered private information.

Forumrules

To achieve meaningful questions, we apply the following rules:

Register

Register getting emails for HP 12c - F2230A at:


You will receive an email to register for one or both of the options.


Get your user manual by e-mail

Enter your email address to receive the manual of HP 12c - F2230A in the language / languages: English as an attachment in your email.

The manual is 1,75 mb in size.

 

You will receive the manual in your email within minutes. If you have not received an email, then probably have entered the wrong email address or your mailbox is too full. In addition, it may be that your ISP may have a maximum size for emails to receive.

Others manual(s) of HP 12c - F2230A

HP 12c - F2230A Quick start guide - Dutch - 41 pages


The manual is sent by email. Check your email

If you have not received an email with the manual within fifteen minutes, it may be that you have a entered a wrong email address or that your ISP has set a maximum size to receive email that is smaller than the size of the manual.

The email address you have provided is not correct.

Please check the email address and correct it.

Your question is posted on this page

Would you like to receive an email when new answers and questions are posted? Please enter your email address.



Info