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Section 15
Savings
Nominal Rate Converted to Effective Rate
Given a nominal interest rate and the number of compounding periods per year,
this keystroke procedure computes the effective annual interest rate.
1. Press and fCLEARG.
2. Key in the annual nominal rate as a percentage, then press \.
3. Key in the number of compounding periods per year, then press nz¼.
4. Key in 100 then press Þ\$.
5. Press M+ to obtain the effective annual interest rate.
Example 1: What is the effective annual interest rate if the annual nominal rate
of 5¼% is compounded quarterly?
For repeated calculations, the following HP 12C Platinum program can be used:
Keystrokes (RPN mode) Display
fCLEARG
5.25\
5.25
Nominal rate.
4nz¼
1.31
Percent quarterly interest rate.
100Þ\
$M+
5.35
Percent effective interest rate.
KEYSTROKES
(RPN mode)
DISPLAY
KEYSTROKES
(RPN mode)
DISPLAY
fs 0
007, 0
f] 0
008, 0
fCLEAR
Î
000,
Þ
009, 16
001, 43 8
\
010, 36
fCLEAR
G
002, 42 34
$
011, 13
n
003, 11
M
012, 15
z
004, 10
+
013, 40
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