Self Study Guide/Certification Test Preparation

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Overview.

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 Table Of Contents

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 Overview of HP 12c Calculator Keys
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 1. Financial Registers

What It Is:

Application:

How To:

[n] [i] [PV] [PMT] [FV]

Example: [n]

[n]

[RCL]

Example:

[n]

[f][REG]

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 2. Simple Interest On A 360 or 365 Day Basis

What It Is:

Application:

How To:

[n]
[i]
[CHS][PV]
[f][INT]

[R ][x><y]

[+]

Example:

[n]
[i]
[CHS][PV]
5. [f][INT]
6. [+]

Answers: $22.50, and $1,022.50

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 3. Compound Interest

What It Is:

Application:

How To:

[g][12x]

[g][12÷]

[f][FIN]
[i] [12÷]

[PV]
[PMT]
[g][BEG]
[g][END]

[FV]
[n]

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 Example:

[f][FIN]
[g][12÷]
[PV]
[CHS][PMT]
[g][END]
[n]

Answer: Number of payments required to pay down the

loan

[÷]

Answer: Number of years required to pay off the loan

[n]
[FV]

[RCL] [PMT]
[+]

Answer: $1,359.20

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 [n]
[FV]

[RCL] [PMT]
[+]

Answer: $2,847.96

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 4. Periodic and Annual Interest Rates

What It Is:

Application:

How To:

[f][FIN]
[n] [g][12x]

[PV]
[PMT]
[g][BEG] [g][END]

[FV]
[i]

[X]

Example:

[f][FIN]
[ENTER] [X][n]
[CHS][PV]
[FV]
[i]
[X]

Answer: 5.988%

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 5. Nominal Interest Rate Conversion To Effective Interest Rate

What It Is:

Application:

How To:

[g][END]
[f][FIN]
[ENTER]

[n][÷][i]
[CHS][ENTER][PV]
[FV][+]

Example:

[g][END]
[f][FIN]
[ENTER]
[n][÷][i]
[CHS][ENTER]
[PV]
[FV][+]

Answer: 6.398%

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 6. Effective Interest Rate Conversion To Nominal Interest Rate

What It Is:

Application:

How To:

[f][FIN]
[n]
[ENTER][PV]

[+][CHS][FV][i]
[RCL][n][X]

Example:

[f][FIN]
[n] [ENTER][PV]
[+][CHS]
[FV][i]
[RCL][n][X]

Answer: 5.149%

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 7. Weighted Average Function

What It Is:

Application:

How To:

a.

[f][ ]

[ ]

[f][ ]
[ENTER]
[ +]

[g][xw]

Example:

[f][ ]
[ENTER] [ +]
[ENTER] [ +]
[ENTER] [ +]
[ENTER] [ +]
[g][xw]

Answer: $227,241
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 8. Discounting Cash Flows: Net Present Value (NPV) and Internal Rate
of Return (IRR)

What It Is:

Application:

How To:

[f][REG]
[CHS]
[g][CF0]
0[g][CF0]
[CHS]

[g][CFj]
0[g][CFj]

[i] [12÷]
[f][NPV]

Example on next page

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 Example:

[f][REG]
[CHS][g][CF0]
[CHS][g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[RCL][n]
[i]
[f][NPV]

Answer: $10,962.66

[f][IRR]

Example:

[f][REG]
[CHS][g][CFj]
[CHS][g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[f][IRR]

Answer: 15.56%

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 [STO]

[g][Nj]

Example:

[STO]
[i]
[f][NPV]

[f][REG]
[CHS]
[g][CF0]
[g][CF0]

[g][Nj]

[CHS]
[g][CFj]
0[g][CFj]

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 [g][Nj]

Example:

[f][REG]
[CHS][g][CF0]
[g][CFj]
[g][CFj]
[g][CFj]
[g][Nj]

[g][CFj]
[g][CFj]
[g][Nj]
[g][CFj]
[g][CFj]
[i]
13. [f][NPV]

Answer: $1,268.19

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 9. Modified Internal Rate of Return (MIRR)

What It Is:

Application:

How To:

Example on next page

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 Example for Annual Cash Flows:

Step 1 of 2:

[f][REG]
[g][CF0]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[i] [f][NPV]
[CHS][PV]
[n][FV]

Interim Step 1 Answer (FV of positive cash flows):

$206.55

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 Step 2 of 2:

[CHS][g][CF0]
[g][CFj]
[g][CFj]
[CHS][g][CFj]
[i] [f][NPV]
[n][i]

Answer (Annual MIRR): 10.77%

Example for Monthly Cash Flows:

Continued on next page

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 Step 1 of 2:

1. [f][REG]
[g][CF0]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][CFj]
[g][12÷] [f][NPV]
[CHS][PV]
[n][FV]

Interim Step 1 Answer (FV of positive cash flows):

$182.00

Step 2 of 2:

[CHS][g][CF0]
[g][CFj]
[g][CFj]
[CHS][g][CFj]
[g][12÷] [f][NPV]
[n][i]

[X]

Answer (Annual MIRR): 105.34%

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 10. Annual Percentage Rate Calculations with Fees

What It Is:

Application:

How To:

[g][END]
[f][FIN]
[n]
[i]
[PV]
[PMT]

[RCL][PV]
[%][ ][PV]

[RCL][PV] [ ][PV]

[RCL][PV] [%][ ]
[ ][PV]
[i]

[X]

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 Example:

[g][END]
2. [f][FIN]
[g][12x]

[g][12÷]
[PV]

[PMT]
[RCL][PV] [%][ ][PV]

8. [i]
[X]

Answer: 6.189%

[g][END]
[f][FIN]
[g][12x]
[g][12÷]
[PV]
[PMT]
[RCL][PV] [%][ ]
[ ][PV]
[i]
[X]

Answer: 6.237%

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 11. Price of a Mortgage Traded at a Discount or Premium

What It Is:

Application:

How To:

i. [g][END]
ii. [f][FIN]

[n]

[i]
[PMT]
[FV]
[PV]

Example:

1. [g][END]
2. [f] [FIN]
[n]
[g][12÷]
[PMT]
[FV][PV]

Answer: $9,507.02

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 Example 2:

1. [g][END]
2. [f][FIN]
3. [g][12x]
[g][12÷]
5. [CHS][PV][PMT]
[g][12÷]
7. [PV]

Answer: $16,780.57

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 12. Yield of a Mortgage Traded at a Discount or Premium

What It Is:

Application:

How To:

a. [g][END]
b. [f][FIN]

[n]
[PMT]
[PV]
[FV]
[i]
12[X]

Example:

1. [g][END]
2. [f][FIN]
[g][12x]
[g][12÷]
[CHS][PV]
6. [PMT]
7. [RCL][n]
[ ][n]
[CHS][PV]
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 10. [i]
[X]

Answer: 11.15%

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