Saturday, December 16, 2023

HP 12C: Simple Interest

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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