HP 12C Platinum Owner’s Handbook And Problem-Solving Guide

HP 12C PlatinumOwner’s HandbookandProblem-Solving Guide Copyright 2003 Hewlett-Packard Development Company, L.P.

IntroductionAbout This HandbookThis HP 12C Platinum Owner’s Handbook and Problem-Solving Guide isintended to help you get the most out of your investment in your HP 12CPlatinum Programmable Financial Calculator. Although the excitement ofacquiring this powerful financial tool may prompt you to set this handbook asideand immediately begin “pressing buttons,” in the long run you’ll profit byreading through this handbook and working through the examples it contains.Following this introduction is a brief section called Making FinancialCalculations Easy—which shows you that your HP 12C Platinum does just that!The remainder of this handbook is organized basically into three parts:zPart I (sections 1 through 7) describes how to use the various financial,mathematics, statistics, and other functions (except for programming)provided in the calculator:zSection 1 is about Getting Started. It tells you how to use the keyboard,how to do simple arithmetic calculations and chain calculations, andhow to use the storage registers (“memories”).zSection 2 tells you how to use the percentage and calendar functions.zSection 3 tells you how to use the simple interest, compound interest,and amortization functions.zSection 4 tells you how to do discounted cash flow analysis, bond, anddepreciation calculations.zSection 5 tells you about miscellaneous operating features such asContinuous Memory, the display, and special function keys.zSections 6 and 7 tell you how to use the statistics, mathematics, andnumber-alteration functions.zPart II (sections 8 through 11) describe how to use the powerfulprogramming capabilities of the HP 12C Platinum.zPart III (sections 12 through 16) give you step-by-step solutions tospecialized problems in real estate, lending, savings, investment analysis,and bonds. Some of these solutions can be done manually, while othersinvolve running a program. Since the programmed solutions are both selfcontained and step-by-step, you can easily employ them even if you don’tcare to learn how to create your own programs. But if you do start to createyour own programs, look over the programs used in the solutions: theycontain examples of good programming techniques and practices.2

Introduction3zThe various appendices describe additional details of calculator operationas well as warranty and service information.zThe Function Key Index and Programming Key Index at the back of thehandbook can be used as a handy page reference to the comprehensiveinformation inside the manualFinancial Calculations in the United KingdomThe calculations for most financial problems in the United Kingdom areidentical to the calculations for those problems in the United States – which aredescribed in this handbook. Certain problems, however, require differentcalculation methods in the United Kingdom than in the United States. Refer toAppendix G for more information.For More Solutions to Financial ProblemsIn addition to the specialized solutions found in Sections 12 through 16 of thishandbook, many more are available in the optional HP 12C Platinum SolutionsHandbook. Included are solutions to problems in lending, forecasting, pricing,statistics, savings, investment analysis, personal finance, securities, Canadianmortgages, learning curves in manufacturing, and queuing theory. The solutionshandbook is available from your authorized HP dealer.

ContentsIntroduction . 2About This Handbook . 2Financial Calculations in the United Kingdom . 3For More Solutions to Financial Problems. 3Part I: Problem Solving.15Section 1: Getting Started . 16Power On and Off.Low-Power Indication .The Keyboard .Keying in Numbers .Digit Separators.Negative Numbers.Keying in Large Numbers .The CLEAR Keys .The RPN and ALG Keys.Simple Arithmetic Calculations in RPN Mode.Chain Calculations in RPN Mode .Storage Registers.Storing and Recalling Numbers.Clearing Storage Registers .Storage Register Arithmetic.161616171717181819192023242525Section 2: Percentage and Calendar Functions. 27Percentage Functions.Percentages .Net amount .Percent Difference.Percent of Total .Calendar Functions .Date Format.Future or Past Dates .Number of Days Between Dates .272727282930303132Section 3: Basic Financial Functions. 34The Financial Registers.Storing Numbers Into the Financial Registers .Displaying Numbers in the Financial Registers .Clearing the Financial Registers.Simple Interest Calculations .Financial Calculations and the Cash Flow Diagram .The Cash Flow Sign Convention .The Payment Mode .Generalized Cash Flow Diagrams.5343434343536383839

6ContentsCompound Interest Calculations .Specifying the Number of Compounding Periods and the PeriodicInterest Rate .Calculating the Number of Payments or Compounding Periods .Calculating the Periodic and Annual Interest Rates .Calculating the Present Value .Calculating the Payment Amount .Calculating the Future Value .Odd-Period n 4: Additional Financial Functions . 58Discounted Cash Flow Analysis: NPV and IRR.Calculating Net Present Value (NPV).Calculating Internal Rate of Return (IRR).Reviewing Cash Flow Entries.Changing Cash Flow Entries .Bond Calculations.Bond Price .Bond Yield .Depreciation Calculations.585963646667676868Section 5: Additional Operating Features . 70Continuous Memory .The Display.Status Indicators.Number Display Formats.Scientific Notation Display Format.Special Displays .The Key.The F Key .Arithmetic Calculations With Constants.Recovering From Errors in Digit Entry.70707071727374747575Section 6: Statistics Functions . 76Accumulating Statistics.Correcting Accumulated Statistics.Mean.Standard Deviation .Linear Estimation.Weighted Mean .767777787981Section 7: Mathematics and Number-Alteration Functions . 82One-Number Functions . 82The Power Function . 84

Contents7Part II: Programming.85Section 8: Programming Basics. 86Why Use Programs? .Creating a Program .Running a Program .Program Memory.Identifying Instructions in Program Lines.Displaying Program Lines.The i000 Instruction and Program Line 000.Expanding Program Memory.Setting the Calculator to a Particular Program Line .Executing a Program One Line at a Time .Interrupting Program Execution.Pausing During Program Execution .Stopping Program Execution.86868788899091919394959598Section 9: Branching and Looping . 101Simple Branching . 101Looping. 101Conditional Branching . 104Section 10: Program Editing. 110Changing the Instruction in a Program Line .Adding Instructions at the End of a Program.Adding Instructions Within a Program .Adding Instructions by Replacement .Adding Instructions by Branching .110111112112113Section 11: Multiple Programs. 117Storing Another Program. 117Running Another Program. 119Part III: Solutions.121Section 12: Real Estate and Lending . 122Annual Percentage Rate Calculations With Fees.Price of a Mortgage Traded at a Discount or Premium .Yield of a Mortgage Traded at a Discount or Premium .The Rent or Buy Decision.Deferred Annuities.122124125127131Section 13: Investment Analysis . 134Partial-Year Depreciation .Straight-Line Depreciation .Declining-Balance Depreciation .Sum-of-the-Years-Digits Depreciation.Full- and Partial-Year Depreciation with Crossover.Excess Depreciation.Modified Internal Rate of Return.134134137139141145145

8ContentsSection 14: Leasing . 148Advance Payments.Solving For Payment .Solving for Yield.Advance Payments With Residual .Solving for Payment .Solving For Yield .148148150152152154Section 15: Savings. 156Nominal Rate Converted to Effective Rate. 156Effective Rate Converted to Nominal Rate. 157Nominal Rate Converted to Continuous Effective Rate. 158Section 16: Bonds. 15930/360 Day Basis Bonds . 159Annual Coupon Bonds. 161Appendixes . 165Appendix A: RPN and the Stack . 166Getting Numbers Into the Stack: The \ Key . 167Termination of Digit Entry .Stack Lift.Rearranging Numbers in the Stack .The Key.The d Key.One-Number Functions and the Stack .Two-Number Functions and the Stack .Mathematics Functions.Percentage Functions.Calendar and Financial Functions .The LAST X Register and the F KEY .Chain Calculations in RPN Mode .Arithmetic Calculations with Constants .168168168168168169169169170171172172173Appendix B: Algebraic Mode (ALG) . 175Simple Arithmetic calculations in ALG mode.Keying in Negative Numbers (Þ).Chain Calculations in ALG mode.Percentage Functions.Percent Difference.Percent of Total .The Power Function .175175176176177177178Appendix C: More About L . 179Appendix D: Error Conditions . 181Error 0: Mathematics .Error 1: Storage Register Overflow .Error 2: Statistics .Error 3: IRR .181181182182

ContentsError 4: Memory.

This HP 12C Platinum Owner’s Handbook and Problem-Solving Guide is intended to help you get the most out of your investment in your HP 12C Platinum Programmable Financial Calculator. Although the excitement of acquiring this powerful financial tool may prompt you to set this handbook aside and immediately begin “pressing buttons,” in the long run you’ll profit by reading through this .