Hp 20B User Manual download pdf (Page 32)

Time Value of Money

To save values for the TVM variables, enter the desired number, followed by the corresponding TVM key. To calculate an

unknown value, enter all known values and press the key of the item you want solved.

Table 3-1 TVM Keys

Keys Description

Stores or calculates the number of payments or compounding periods.

Multiplies a value by the number of payments per year and stores as N

Stores or calculates the nominal, annual interest rate.

Stores or calculates the present value (PV). To a lender or borrower, PV is the amount of a loan;

to an investor, PV is the initial investment. PV always occurs at the beginning of the first period.

Stores or calculates the amount of each periodic payment.

[

Stores the number of payments or compounding periods per year.

Stores or calculates the future value (FV), a final cash flow. FV always occurs at the end of the

last compounding period.

Sets Begin mode (Beg). Payments occur at the beginning of each compounding period.

]

Sets End mode (End). Payments occur at the end of each compounding period.

Calculating Payments on a Loan

You borrow 140,000.00 for 30 years (360 months) at 6.5% annual interest, compounded monthly. What is your monthly

payment to the lender? Note: at the end of the 30 years, you expect to have a zero balance (FV=0).

Table 3-2 TVM Example

Keys Display Description

12:[

Inputs

as the number of payments per year, or

compounding periods per year.

360

Inputs

360

as the number of payments over 30 years.

6.5

Inputs

6.5%

as the nominal interest rate percentage per year.

1400

00V

Inputs the present value of the loan at the time of the first

payment. This value is positive (+); it is money you receive.

Inputs

as the future value of the loan (the remaining

balance).

1 2 ... 27 28 29 30 31 32 33 34 35 36 37 ... 74 75

No comments

Hp 20B User Manual Page 32