HP 12C: Simple Interest
Some short-term loans and accounts accrue interest using the simple interest method. This is different from the conventional compound interest method.
Simple Interest Formula
T = B + B × R% × N = P × (1 + R% × N)
T = total future value (uses the FV register)
B = beginning value (uses the PV register)
R = annual interest rate (uses the i register)
N = time in years (uses the n register)
The program uses four of the TVM registers for the purpose of storing registers in a convenient way.
HP 12C Code: Simple Interest
Step : Key Code : Key
# Solve for the future value, GTO 01, R/S
01: __, 45, 13: RCL PV
02: __, 45, 12: RCL i
03: __, 45, 11: RCL n
04: __, __, 20: ×
05: __, __, 25: %
06: __, __, 40: +
07: __, 44, 15: STO FV
08: 43, 33, 00: GTO 00
# Solve for the present value, GTO 09, R/S
09: __, 45, 15: RCL FV
10: __, __, _1: 1
11: __, 45, 12: RCL i
12: __, 45, 11: RCL n
13: __, __, 20: ×
14: __, __, 25: %
15: __, __, 40: +
16: __, __, 10: ÷
17: __, 44, 13: STO PV
18: 43, 33, 00: GTO 00
# Solve for the time in years, GTO 19, R/S
19: __, 45, 15: RCL FV
20: __, 45, 13: RCL PV
21: __, __, 10: ÷
22: __, __, _1: 1
23: __, __, 30: -
24: __, 45, 12: RCL i
25: __, __, 10: ÷
26: __, __, _1: 1
27: __, __, 26: EEX
28: __, __, _2: 2
29: __, __, 20: ×
30: __, 44, 11: STO n
31: 43, 33, 00: GTO 00
# Solve for the interest rate, GTO 32, R/S
32: __, 45, 15: RCL FV
33: __, 45, 13: RCL PV
34: __, __, 10: ÷
35: __, __, _1: 1
36: __, __, 30: -
37: __, 45, 11: RCL n
38: __, __, 10: ÷
39: __, __, _1: 1
40: __, __, 26: EEX
41: __, __, _2: 2
42: __, __, 20: ×
43: __, 44, 12: STO i
44: 43, 33, 00: GTO 00
Summary
T = B + B × R% × N
To solve for T: GTO 01, [ R/S ]
To solve for B: GTO 09, [ R/S ]
To solve for N: GTO 19, [ R/S ]
To solve for R: GTO 32, [ R/S ]
Examples
1. What is the interest rate required if you begin with $1,000.00 and end up with $1,135.00 in 5 years? Assume that account accrues using simple interest.
1000 [ PV ]
1135 [ FV ]
5 [ n ]
GTO 32, [ R/S ]
Answer: 2.70%.
2. An auto loan of $8,000.00 is to paid back in 60 monthly payments (5 years). The loan's rate is 6% at simple interest. What is the monthly payment of this loan?
The first step is to find the total amount:
8000 [ PV ]
6 [ i ]
5 [ n ]
GTO 01, [ R/S ]
T = $10,400.00 (total plus interest)
[ RCL ] [ FV ] 60 [ ÷ ]
Monthly payment with simple interest: $ 173.33
Source
Hayes, Adam. "Simple Interest: Who Benefits, With Formula and Example" Investopedia. Last updated May 27, 2023. Retrieved November 19, 2023.
URL: https://www.investopedia.com/terms/s/simple_interest.asp
Eddie
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