Advertisement
Example 2:
What is the PV of the same annuity?
Leave data in calculator, but enter 0 as the FV to override, then press
Annuities Due
Each payment of an annuity due occurs at the beginning of the period instead of at the end as with a regular
annuity. In essence, each payment is shifted back one period. To analyze annuities due press
BEG/END
. The word "begin" appears on the screen. Now the HP analyzes the cash flows based on
beginning of period payments. Change back to end mode by pressing
Interest Conversion
The following equation is used to convert a nominal rate to an effective rate.
Given: k
= 10% and m = 12 payments/year,
Nom
However, it's much easier to convert the nominal rate using the calculator:
NOM %
10
P/YR
12
EFF %
Now switch back to 1 payment/year: 1
= 10.47% shows on the screen.
P/YR
PV
.
Hewlett-Packard 10B Tutorial
Page 7
to get $421.24.
BEG/END
.
Advertisement
