# FINANCE PROGRAMS

The Finance programs are taken from the "HP17BII+ Financial calculator Owner's manual" See that manuals for more information and several examples.

# Usage: Executes the following programs:

 ICNV Interest rate conversions CFLO Cash flow DEPRC Depreciations %CALC Percentage calculations in business CURRX Currency exchange calculations

# ICNV

Interest Rate Conversions

The interest conversion (ICNV) menu converts between nominal and effective interest rates. To compare investments with different compounding periods, their nominal interest rates are converted to effective interest rates. This allows you, for example, to compare a savings account that pays interest quarterly with a bond that pays interest semiannually.

·        The nominal rate is the stated annual interest rate compounded periodically, such as 18% per year compounded monthly.

·        The effective rate is the rate that, compounded only once (that is, annually), would produce the same final value as the nominal rate. A nominal annual rate of 18% compounded monthly equals an effective annual rate of 19.56%.

When the compounding period for a given nominal rate is one year, then that nominal annual rate is the same as its effective annual rate.

# Usage: Periodic compounding: Continuous compounding: ## Description

[NOM%]

Convert to Nominal interest rate

[EFF%]

Convert to Effective interest rate

[P]

Number of compounding periods per year

Example:

## This example is taken from the "HP17BII+ Financial calculator Owner's manual"

Converting from a Nominal to an Effective Interest Rate.

You are considering opening a savings account in one of three banks.

Which bank has the most favorable interest rate?

·        Bank #l     6.7% annual interest, compounded quarterly.

·        Bank #2    6.65% annual interest, compounded monthly.

·        Bank #3    6.65% annual interest, compounded continuously.

Keys

Display

## Description

[PER]

Selecting Periodic compounding

4  [P]

P=4

Stores number of compounding periods per year for bank #1

6.7 [EFF%]

6.8702

Calculates effective interest rate for bank #1

12 [P]

P=12

Stores number of compounding periods per year for bank #2

6.65 [EFF%]

6.8565

Calculates effective interest rate for bank #2

[EXIT] [CONT]

Selecting Continuous compounding

6.65 [EFF%]

6.8761

Calculates effective interest rate for bank #2

See the "HP17BII+ Financial calculator Owner's manual" for more information about Interest Rate Conversions. There are also some examples in that manual.

# CFLO

Cash Flow calculations.

# Usage:  ## Description

[CALC]

Accesses the CALC menu to calculate TOTAL, IRR% and NPV

[EDIT]

Edit a existing set of data

[NEW]

Start a new set of data

[TOTAL]

## Calculates the sum of the cash flows.

[IRR%]

Calculates the internal rate of return - the interest (discount) rate at which the net present value of the cash flows equals zero.

[I%]

## Prompts for the periodic interest rate, expressed as a percentage

[NPV]

Given I%, calculates the net present value - the present value of a series of cash flows.

Creating a Cash-flow list

Press [NEW] for starting a new Cash-flow list. An existing list is overwritten with a new, empty list. The Cash-flow list is stored into variable "CF".

When ST-X containing a [N x 1] matrix, this matrix is stored into variable "CF" and can be used for the cash-flow calculations.

Press [EDIT] for edit the Cash-flow list. This executes the HP42S internal Matrix editor. Now you can enter cash flows into the Cash-flow list.

Use [INSR] (insert Row), or [GROW] on the second page of the Matrix editor menu for inserting new cash flows.

Exit the Matrix Editor by pressing [R/S]

Cash-flow calculations:

Once you have entered a list of cash flows, you can calculate the following values in the CALC menu.

1.      Sum (TOTAL), Calculates the sum of the cash flows.

2.      Internal rate of return (IRR%). This is a periodic rate of return. To calculate an annual nominal rate when the period is not a year, multiply the IRR% by the number of periods per year.

3.      Net present value (NPV) for a specified, periodic interest rate, I%.

See the "HP17BII+ Financial calculator Owner's manual" for more information about Cash-flow calculations. There are also some examples in that manual.

# DEPRC

Depreciation

The DEPRC (depreciation) program calculates depreciation values and remaining depreciable values one year a time.

# Usage: [Arrow Up] / [Arrow Down] ## Description

[BASIS]

Stores the depreciable cost basis of the asset at acquisition.

[SALV]

Stores the salvage value of the asset at the end of its useful life. If there is no salvage value, set SALV=0.

[LIFE]

Stores the expected useful life (in whole years) of the asset.

ACRS%

Stores the appropriate Accelerated Cost Recovery System percentage from the published ACRS tables.

ACRS

Calculates the ACRS deduction based on BASIS and ACRS%. (The values in SALV, LIFE, FACT%, and YR# do not matter.)

YR#

Stores the number of the year for which you want the depreciation (1, 2, etc.).

FACT%

Stores the declining-balance factor as a percentage of the straight-line rate. This is for the DB method only. For example, for a rate 1¼ times (125%) the straight-line rate, enter 125.

DB

Calculates the declining-balance depreciation for the year.

SOYD

Calculates the sum-of-the-years'-digits depreciation for the year.

SL

Calculates the straight-line depreciation for the year.

Calculate the depreciation for an asset:

1. Define the characteristics of the asset:
Key in the cost basis and press [BASIS]
Key on the salvage value and press [SALV] if there is no salvage value, enter zero.
Key in the useful life and press [LIFE]
2. Press [Arrow up] of [Arrow Down] for the rest of the DEPRC menu.
3. Key in the number for the year of depreciation you want to calculate and press [YR#]
4. If you are using the declining-balance method, enter the DB factor (a percentage) and press [FACT%]
5. Press [DB], [SOYD] or [SL] to calculate the appropriate depreciation.
6. ST-X now containing the Depreciation, ST-Y now containing the remaining depreciable value (basis - salvage value - accumulated depreciation)
7. To calculate the depreciation for another year, just change YR# and press [DB], [SOYD] or [SL] again.

# The ACRS Method

To calculate the amount of tax deduction under the U.S. Accelerated Cost Recovery System:

1.      Enter the cost basis of the asset and press [BASIS].

2.      The Internal Revenue Service publishes tables that list the percentage of an asset's basis that can be deducted each year of its prescribed life. Look up that value, enter it, and press [ACRS%].

3.      Press [ACRS] to calculate the value of the deduction.

See the "HP17BII+ Financial calculator Owner's manual" for more information about depreciation. There are also some examples in that manual.

# Usage: ## Description

Percent change

[%CHG]

The difference between two numbers (OLD and NEW), expressed as a percentage (%CH) of OLD.

Percent of total

[%TOTL]

The portion that one number (PART) is of another (TOTAL), expressed as a percentage (%T).

## Markup on cost

[MU%C]

The difference between price (PRICE) and cost (COST), expressed as a percentage of the cost (M%C).

Markup on price

[MU%P]

The difference between price (PRICE) and cost (COST), expressed as a percentage of the price (M%P).

Select in the %CALC menu one of the programs ("%CHG", "%TOTL","MU%C", "MU%P"), enter the know values and solve for the unknown value.

Press [RCL]  "Variable" for recall a variable, Press "Shift" "variable" for view a variable.

The %CALC program consist of five programs:

The %CALC program itself and 4 independent (solver) programs:

"%CHG", "%TOTL","MU%C", "MU%P"

Each of the four programs can be used using the solver

See the "HP17BII+ Financial calculator Owner's manual" for more information about the percentage calculations in business. There are also some examples in that manual.

# CURRX

Currency exchange calculations.

# Usage: # Selecting a set of currencies

Press [SELCT] for display the currencies menu. Press a menu key to select currency no 1, and currency no 2.

When pressing [OTHER] you can type your own currency.

# Enter a Rate

When pressing [RATE] you can give for both currencies the value's.

Example:

1 Euro = 0.987 US\$

Press [Rate] and enter 0.987 for US\$

Press [R/S] and enter 1 for EURO

Press [R/S] and the Rate is calculated   # Converting between two currencies

Converting form US\$ to Euro, enter the value in US\$ and press [EURO] now the value in Euro is calculated.

Converting form Euro to US\$, enter the value in Euro and press [US\$] now the value in US\$ is calculated.

Example:

How much Euro is 45.67 US\$?

Enter 45.67 and press [EURO]

# TVM

Time Value of Money for the solver.

This is the same program as is printed in the HP42S owner's manual, with 2 adaptations:

1.      Variable for Periods per Year [P/YR].

2.      Variable of payment at the beginning or the End. [B1/E0]
[B1/E0] = 0: Payment at the end
[B1/E0] = 1: Payment at the beginning

# Usage:  Use the Solver to calculate the unknown values.

See the "HP17BII+ Financial calculator Owner's manual" for more information about Time Value of Money. There are also some examples in that manual.