Sharp EL733A EL-733A Operation Manual - Page 58

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(For more details on sliding cash-flows with the TVM functions, you may want to review page 100.) You can think of INN as though it treats each cash-flow as a separate loan. In the previous example, if you slide just the first $6'000 cash-flow to the front of the time line, adjusting it for the interest rate, the cash-flow schedule would look like this: 1=18%APR(+12) 10'000 10'000 10'000 6'000 6'000 t 5487.25 ill t 111 i I I I I I I I I I IHI I I I I I I I I I I I till year 1 year 2 year 3 By sliding the first $6'000 cash-flow back six periods and adjusting for the 1.5% periodic interest rate, you reduce its value (you discount it) to about $5487.25. Next if you slide the first $10'000 cash-flow to the front of the time line, it looks like this: I 8'616.67 5487.25 'MIMI "N., year 1 18% APR (÷ 12) 10'000 i t 6'000 10'000 ill 61000 f 10'000 ill ' II II IIII I 11111 III 7\,, ,, V. V year 2 year 3 Then, slide the next $10'000 cash-flow to the front: 8'489.33 8'616.67 5487.25 i= 18% APR (+ 12) 10'000 6'000 10'000 6'000 10'000 /\. year-1 year 2 year 3 Notice that, because it is slid back one period farther than the first $10'000 cash flow, the second $10,000 cash-flow is worth less up front. .112 113

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(For
more
details
on
sliding
cash
-flows
with
the
TVM
functions,
you
may
want
to
review
page
100.)
You
can
think
of
INN
as
though
it
treats
each
cash
-flow
as
a
separate
loan.
In
the
previous
example,
if
you
slide
just
the
first
$6'000
cash
-flow
to
the
front
of
the
time
line,
adjusting
it
for
the
interest
rate,
the
cash
-flow
schedule
would
look
li
ke
this:
1=18%APR(+12)
10'000
10'000
10'000
6'000
6'000
t
5487.25
ill
t
111
i
till
I
I
I
I
I
I
I
I
I
IHI
I
I
I
I
I
I
I
I
I
I
I
year
1
year
2
year
3
By
sliding
the
fi
rst
$6'000
cash
-flow
back
six
periods
and
adjusting
for
the
1.5%
periodic
interest
rate,
you
reduce
its
value
(you
discount
it)
to
about
$5487.25.
.112
Next
if
you
slide
the
fi
rst
$10'000
cash
-flow
to
the
front
of
the
time
line,
it
looks
li
ke
this:
18%
APR
(รท
12)
I
8'616.67
10'000
10'000
10'000
5487.25
i t
6'000
ill
6
1
000
f
ill
'MIMI
'
I
I
I
I
I
I
I
I
I
1
1
1
1
1
I
I
I
"N.,
7\,,
,,
V.
V
year
1
year
2
year
3
Then,
slide
the
next
$10'000
cash
-flow
to
the
front:
8'489.33
8'616.67
5487.25
i=
18%
APR
(+
12)
10'000
6'000
10'000
6'000
10'000
/\.
year
-1
year
2
year
3
Notice
that,
because
it
is
slid
back
one
period
farther
than
the
fi
rst
$10'000
cash
fl
ow,
the
second
$10
,
000
cash
-flow
is
worth
less
up
front.
113