Financial Calculations Worksheet Page 7
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3019 - 3
Compound Interest Calculations
PV + FV
PMT = –
n
PV + FV
n = –
PMT
• A deposit is indicated by a plus sign (+), while a withdrawal is indicated by a
minus sign (–).
u u u u u Converting between the nominal interest rate and effective
interest rate
I
The nominal interest rate (
% value input by user) is converted to an effective
I
P/Y
interest rate (
%') when the number of installments per year (
) is different from
C/Y
the number of compound interest calculation periods (
). This conversion is
required for installment savings accounts, loan repayments, etc.
{
}
[C / Y ]
P/Y
: installment
I%
[P / Y ]
×100
periods per year
I%' =
(1+
)
–1
100 × [C / Y ]
C/Y
: compounding
periods per year
n
PV
PMT
FV
When calculating
,
,
,
The following calculation is performed after conversion from the nominal interest
rate to the effective interest rate, and the result is used for all subsequent
calculations.
i = I%'÷100
I
When calculating
%
I
I
After
% is obtained, the following calculation is performed to convert to
%'.
[P / Y ]
P/Y
{
}
: installment
I%
[C / Y ]
×[C / Y ]×100
periods per year
I%' =
(1+
)
–1
100
C/Y
: compounding
periods per year
I
I
The value of
%' is returned as the result of the
% calculation.
Press 2 (CMPD) in the Financial 1 screen to display the input screen for
compound interest calculation.
n
..................... number of compound periods
I
% ................... annual interest rate
PV
.................. present value (loan amount in case of loan; principal in case
of savings)
327
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Education