HP HP12C hp 12c_user's guide_English_E_HDPMBF12E44.pdf - Page 134

134 Section 12: Real Estate and Lending Keystrokes 4n 10¼ 70000$ t t t Display 4.00 10.00 70,000.00 32,391.87 19.56 21,533.79 Years in investment. Yearly appreciation rate. House price. NCPR (calculated). Yield. Balance in savings. By purchasing a house, you would gain $10,858.08 (32,391.87 - 21,533.79) over an alternate investment at 6.25% interest. Deferred Annuities Sometimes transactions are established where payments do not begin for a specified number of periods; the payments are deferred. The technique for calculating NPV may be applied assuming zero for the first cash flow. Refer to pages 58 through 62. Example 1: You have just inherited $20,000 and wish to put some of it aside for your daughter's college education. You estimate that when she is of college age, 9 years from now, she will need $7,000 at the beginning of each year for 4 years for college tuition and expenses. You wish to establish a fund which earns 6% annually. How much do you need to deposit in the fund today to meet your daughter's educational expenses? Keystrokes Display fCLEARH 0gJ 0gK 8ga 7000gK 4ga 6¼ fl 0.00 0.00 0.00 8.00 7,000.00 4.00 6.00 15,218.35 Initialize. First cash flow. Second through ninth cash flows. Tenth through thirteenth cash flows. Interest. NPV. File name: hp 12c_user's guide_English_HDPMBF12E44 Printered Date: 2005/7/29 Page: 134 of 209 Dimension: 14.8 cm x 21 cm