Sharp EL733A EL-733A Operation Manual - Page 37

IH IE. F1-EFF1 H1 P-1

Get Sharp EL733A PDF manuals and user guides View all Sharp EL733A manuals
Add to My Manuals
Save this manual to your list of manuals

Page 37 highlights

1.5% month 1 2 3 4 5 16 7 8 1111 1 1 119.56 I10 i11 I12 -100.00 Two functions on the EL-733A allow you to convert APR's to EFFective APR's and vice versa: • The RR FR key allows you to calculate an effective annual rate given a nominal APR and the number of periods in a year. • The 2nd EAPFI key allows you to calculate a nominal APR given an effective annual rate and the number of periods in a year. The keystrokes required to calculate the above effective rate of 19.56% for 12 compounding periods of an 18% APR would be as follows: 12 znd ffF 18 H Result: 19.56 To convert this rate back to an APR, first store it by pressing Ir44 , then press the following keys: 12 FM l•APF4 RM H Result: 18.00 Remember: key in the number of compounding periods in a year first, press the conversion keys, then key in the rate you wish to convert and press E. The following examples are provided for practice in converting rates from APR's to effective APR's. This is an important skill to develop before looking at the subject in the next section (Payment Period And Interest Period Differ). Example: What is the effective annual interest rate for 18% APR, compounded daily? Solution: The first question you need to ask when you are dealing with daily compounding is, "how many days are in a year?" The answer may not be as simple as it seems. Some contracts are written with daily compounding based on a 360 day year and some are based on a 365 day year. And neither of these are accurate per se, because a calendar year varies from 365 to 366 days a year. In this problem, assume that a year is considered to have 365 days. The keystrokes are as follows: (Mode: FIN) 365 (2ncln 1-EFF1 18 El Result: 19.71642428 All ten digits of the result are shown because everyone is important. You probably have your calculator set to display just two decimal places, but whenever you are working with interest rates (especially), all the digits are important. Press 2ndr TAB [] to display all the digits. If you write down an answer to be used in a later calculation, copy down every digit available. If you have your display set to [ifil97 1-1 and you use that displayed version of the result, you may be introducing rounding errors to your

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
1.5%
month
1
1
1
1
1
2
3
4
5
16
1
7
1
8
10
11
I
i
12
I
-100.00
Two
functions
on
the
EL
-733A
allow
you
to
convert
APR's
to
EFFective
APR's
and
vice
versa:
•
The
RR
FR
key
allows
you
to
calculate
an
effective
annual
rate
given
a
nominal
APR
and
the
number
of
periods
in
a
year.
•
The
2nd
EAPFI
key
allows
you
to
calculate
a
nominal
APR
given
an
effective
annual
rate
and
the
number
of
periods
in
a
year.
The
keystrokes
required
to
calculate
the
above
effective
rate
of
19.56%
for
12
compounding
periods
of
an
18%
APR
would
be
as
follows:
12
znd
ff
F
18
H
Result:
19.56
To
convert
this
rate
back
to
an
APR,
fi
rst
store
it
by
pressing
Ir44
,
then
press
the
following
keys:
12
FM
l•APF4
RM
H
Result:
18.00
Remember:
key
in
the
number
of
compounding
periods
in
a
year
fi
rst,
press
the
conversion
keys,
then
key
in
the
rate
you
wish
to
convert
and
press
E.
The
following
examples
are
provided
for
practice
in
119.56
converting
rates
from
APR's
to
effective
APR's.
This
is
an
important
skill
to
develop
before
looking
at
the
subject
in
the
next
section
(Payment
Period
And
Int
e
rest
P
e
ri
o
d
Diff
er
)
.
Example:
What
is
the
effective
annual
interest
rate
for
18%
APR,
compounded
daily?
Solution:
The
fi
rst
question
you
need
to
ask
when
you
are
dealing
with
daily
compounding
is,
"how
many
days
are
in
a
year?"
The
answer
may
not
be
as
simple
as
it
seems.
Some
contracts
are
written
with
daily
compounding
based
on
a
360
day
year
and
some
are
based
on
a
365
day
year.
And
neither
of
these
are
accurate
per
se,
because
a
calendar
year
varies
from
365
to
366
days
a
year.
In
this
problem,
assume
that
a
year
is
considered
to
have
365
days.
The
keystrokes
are
as
follows:
(Mode:
FIN)
365
(2ncln
1-EFF1
18
El
Result:
19.71642428
All
ten
digits
of
the
result
are
shown
because
everyone
is
important.
You
probably
have
your
calculator
set
to
display
just
two
decimal
places,
but
whenever
you
are
working
with
interest
rates
(especially),
all
the
digits
are
important.
Press
2ndr
TAB
[]
to
display
all
the
digits.
If
you
write
down
an
answer
to
be
used
in
a
later
calculation,
copy
down
every
digit
available.
If
you
have
your
display
set
to
[ifil97
1
-1
and
you
use
that
displayed
version
of
the
result,
you
may
be
introducing
rounding
errors
to
your