HP 12c Owners Manual
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File name: hp 12c_users guide_English_HDPMBF12E44 Page: 1 of 209 Printed Date: 2005/7/29 Dimension: 14.8 cm x 21 cm hp 12c financial calculator users guide H Edition 4 HP Part Number 0012C-90001
2 File name: hp 12c_users guide_English_HDPMBF12E44 Page: 2 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Notice REGISTER YOUR PRODUCT AT: www.register.hp.com THIS MANUAL AND ANY EXAMPLES CONTAINED HEREIN ARE PROVIDED “AS IS” AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. HEWLETT-PACKARD COMPANY MAKES NO WARRANTY OF ANY KIND WITH REGARD TO THIS MANUAL, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. HEWLETT-PACKARD CO. SHALL NOT BE LIABLE FOR ANY ERRORS OR FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OR USE OF THIS MANUAL OR THE EXAMPLES CONTAINED HEREIN. © Copyright 1981, 2004 Hewlett-Packard Development Company, L.P. Reproduction, adaptation, or translation of this manual is prohibited without prior written permission of Hewlett-Packard Company, except as allowed under the copyright laws. Hewlett-Packard Company 4995 Murphy Canyon Rd, Suite 301 San Diego, CA 92123 Printing History Edition 4 August 2004
3 File name: hp 12c_users guide_English_HDPMBF12E44 Page: 3 of 209 Printed Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Introduction About This Handbook This hp 12c users guide is intended to help you get the most out of your investment in your hp 12c Programmable Financial Calculator. Although the excitement of acquiring this powerful financial tool may prompt you to set this handbook aside and immediately begin “pressing buttons,” in the long run you’ll profit by reading through this handbook and working through the examples it contains. Following this introduction is a brief section called Making Financial Calculations Easy—which shows you that your hp 12c does just that! The remainder of this handbook is organized basically into three parts: z Part I (sections 1 through 7) describes how to use the various financial, mathematics, statistics, and other functions (except for programming) provided in the calculator: z Section 1 is about Getting Started. It tells you how to use the keyboard, how to do simple arithmetic calculations and chain calculations, and how to use the storage registers (“memories”). z Section 2 tells you how to use the percentage and calendar functions. z Section 3 tells you how to use the simple interest, compound interest, and amortization functions. z Section 4 tells you how to do discounted cash flow analysis, bond, and depreciation calculations. z Section 5 tells you about miscellaneous operating features such as Continuous Memory, the display, and special function keys. z Sections 6 and 7 tell you how to use the statistics, mathematics, and number-alteration functions. z Part II (sections 8 through 11) describe how to use the powerful programming capabilities of the hp 12c. z Part III (sections 12 through 16) give you step-by-step solutions to specialized problems in real estate, lending, savings, investment analysis, and bonds. Some of these solutions can be done manually, while others involve running a program. Since the programmed solutions are both self-contained and step-by-step, you can easily employ them even if you don’t care to learn how to create your own programs. But if you do start to create your own programs, look over the programs used in the solutions: they contain examples of good programming techniques and practices.
4 Introduction File name: hp 12c_users guide_English_HDPMBF12E44 Page: 4 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm z The various appendices describe additional details of calculator operation as well as warranty and service information. z The Function Key Index and Programming Key Index at the back of the handbook can be used as a handy page reference to the comprehensive information inside the manual Financial Calculations in the United Kingdom The calculations for most financial problems in the United Kingdom are identical to the calculations for those problems in the United States — which are described in this handbook. Certain problems, however, require different calculation methods in the United Kingdom than in the United States. Refer to Appendix F for more information. For More Solutions to Financial Problems In addition to the specialized solutions found in Sections 12 through 16 of this handbook, many more are available in the optional hp 12c Solutions Handbook. Included are solutions to problems in lending, forecasting, pricing, statistics, savings, investment analysis, personal finance, securities, Canadian mortgages, learning curves in manufacturing, and queuing theory. A Solutions Handbook is available online (www.hp.com/calculators ).
5 File name: hp 12c_users guide_English_HDPMBF12E44 Page: 5 of 209 Printed Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Contents Introduction.................................................................... 3 About This Handbook .....................................................................3 Financial Calculations in the United Kingdom.....................................4 For More Solutions to Financial Problems ...........................................4 Part I. Problem Solving ......................................... 15 Section 1: Getting Started............................................. 16 Power On and Off........................................................................16 Low-Power Indication ..............................................................16 The Keyboard ..............................................................................16 Keying in Numbers ................................................................17 Digit Separators ....................................................................17 Negative Numbers ................................................................17 Keying in Large Numbers .......................................................18 The CLEAR Keys ....................................................................18 Simple Arithmetic Calculations .......................................................19 Chain Calculations .......................................................................20 Storage Registers.......................................................................... 23 Storing and Recalling Numbers ............................................... 23 Clearing Storage Registers ...................................................... 24 Storage Register Arithmetic ..................................................... 24 Section 2: Percentage and Calendar Functions ................ 26 Percentage Functions..................................................................... 26 Percentages .......................................................................... 26 Net Amount .......................................................................... 27 Percent Difference .................................................................. 27 Percent of Total ......................................................................28 Calendar Functions.......................................................................29 Date Format ..........................................................................29 Future or Past Dates................................................................30 Number of Days Between Dates ..............................................31 Section 3: Basic Financial Functions ............................... 32 The Financial Registers .................................................................. 32 Storing Numbers Into the Financial Registers ............................. 32 Displaying Numbers in the Financial Registers ........................... 32
6 Contents File name: hp 12c_users guide_English_HDPMBF12E44 Page: 6 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Clearing the Financial Registers .............................................. 33 Simple Interest Calculations........................................................... 33 Financial Calculations and the Cash Flow Diagram .......................... 34 The Cash Flow Sign Convention .............................................. 36 The Payment Mode ............................................................... 37 Generalized Cash Flow Diagrams ........................................... 37 Compound Interest Calculations..................................................... 39 Specifying the Number of Compounding Periods and the Periodic Interest Rate ......................................................................... 39 Calculating the Number of Payments or Compounding Periods ... 39 Calculating the Periodic and Annual Interest Rates..................... 43 Calculating the Present Value ................................................. 44 Calculating the Payment Amount ............................................. 46 Calculating the Future Value ................................................... 48 Odd-Period Calculations ........................................................ 50 Amortization ............................................................................... 54 Section 4: Additional Financial Functions ....................... 57 Discounted Cash Flow Analysis: NPV and IRR ................................. 57 Calculating Net Present Value (NPV) ....................................... 58 Calculating Internal Rate of Return (IRR) ................................... 63 Reviewing Cash Flow Entries................................................... 64 Changing Cash Flow Entries................................................... 65 Bond Calculations ....................................................................... 66 Bond Price ............................................................................67 Bond Yield ............................................................................67 Depreciation Calculations ............................................................. 68 Section 5: Additional Operating Features ....................... 70 Continuous Memory..................................................................... 70 The Display................................................................................. 71 Status Indicators ................................................................... 71 Number Display Formats ....................................................... 71 Scientific Notation Display Format ........................................... 72 Special Displays ................................................................... 73 The key ..............................................................................74 The Key..............................................................................74 Arithmetic Calculations With Constants .................................... 75 Recovering From Errors in Digit Entry ....................................... 75
Contents 7 File name: hp 12c_users guide_English_HDPMBF12E44 Page: 7 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Section 6: Statistics Functions ........................................ 76 Accumulating Statistics .................................................................. 76 Correcting Accumulated Statistics ...................................................77 Mean .........................................................................................77 Standard Deviation ....................................................................... 79 Linear Estimation ..........................................................................80 Weighted Mean...........................................................................81 Section 7: Mathematics and Number-Alteration Functions 83 One-Number Functions .................................................................83 The Power Function .......................................................................85 Part II. Programming ............................................. 87 Section 8: Programming Basics ..................................... 88 Why Use Programs? .....................................................................88 Creating a Program ......................................................................88 Running a Program .......................................................................89 Program Memory .........................................................................90 Identifying Instructions in Program Lines ....................................91 Displaying Program Lines ........................................................92 The 00 Instruction and Program Line 00 ............................ 93 Expanding Program Memory .................................................. 94 Setting the Calculator to a Particular Program Line .....................95 Executing a Program One Line at a Time ......................................... 96 Interrupting Program Execution ....................................................... 97 Pausing During Program Execution ........................................... 97 Stopping Program Execution .................................................101 Section 9: Branching and Looping ............................... 103 Simple Branching .......................................................................103 Looping ....................................................................................104 Conditional Branching ................................................................ 107 Section 10: Program Editing ......................................... 113 Changing the Instruction in a Program Line ....................................113 Adding Instructions at the End of a Program ..................................114 Adding Instructions Within a Program ...........................................115 Adding Instructions by Replacement .......................................115 Adding Instructions by Branching...........................................116
8 Contents File name: hp 12c_users guide_English_HDPMBF12E44 Page: 8 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Section 11: Multiple Programs ...................................... 120 Storing Another Program ............................................................ 120 Running Another Program ........................................................... 122 Part III. Solutions .................................................. 123 Section 12: Real Estate and Lending .............................. 124 Annual Percentage Rate Calculations With Fees............................. 124 Price of a Mortgage Traded at a Discount or Premium .................... 126 Yield of a Mortgage Traded at a Discount or Premium ................... 128 The Rent or Buy Decision ............................................................ 130 Deferred Annuities ..................................................................... 134 Section 13: Investment Analysis .................................... 136 Partial-Year Depreciation............................................................. 136 Straight-Line Depreciation..................................................... 136 Declining-Balance Depreciation ............................................ 139 Sum-of-the-Years-Digits Depreciation ...................................... 141 Full- and Partial-Year Depreciation with Crossover .......................... 144 Excess Depreciation ................................................................... 148 Modified Internal Rate of Return................................................... 148 Section 14: Leasing ...................................................... 151 Advance Payments ..................................................................... 151 Solving For Payment ............................................................ 151 Solving for Yield ................................................................. 154 Advance Payments With Residual ................................................ 156 Solving for Payment ............................................................. 156 Solving For Yield ................................................................. 158 Section 15: Savings...................................................... 160 Nominal Rate Converted to Effective Rate ..................................... 160 Effective Rate Converted to Nominal Rate ..................................... 161 Nominal Rate Converted to Continuous Effective Rate ..................... 162 Section 16: Bonds ........................................................ 163 30/360 Day Basis Bonds ........................................................... 163 Annual Coupon Bonds ............................................................... 166
Contents 9 File name: hp 12c_users guide_English_HDPMBF12E44 Page: 9 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm Appendixes ................................................................ 169 Appendix A: The Automatic Memory Stack ................... 170 Getting Numbers Into the Stack: The Key..............................171 Termination of Digit Entry ..................................................... 172 Stack Lift ............................................................................. 172 Rearranging Numbers in the Stack ............................................... 172 The key ..................................................................... 172 The Key ....................................................................... 172 One-Number Functions and the Stack ........................................... 173 Two-Number Functions and the Stack ............................................ 173 Mathematics Functions ......................................................... 173 Percentage Functions ............................................................ 174 Calendar and Financial Functions................................................. 175 The LAST X Register and the Key ......................................... 176 Chain Calculations ..................................................................... 176 Arithmetic Calculations with Constants ..........................................177 Appendix B: More About L...................................... 179 Appendix C: Error Conditions ...................................... 181 Error 0: Mathematics ..................................................................181 Error 1: Storage Register Overflow ...............................................182 Error 2: Statistics ........................................................................182 Error 3: IRR................................................................................182 Error 4: Memory ........................................................................182 Error 5: Compound Interest..........................................................183 Error 6: Storage Registers ............................................................183 Error 7: IRR ................................................................................184 Error 8: Calendar .......................................................................184 Error 9: Service ..........................................................................184 Pr Error .....................................................................................184 Appendix D: Formulas Used ........................................ 185 Percentage ................................................................................185 Interest ......................................................................................185 Simple Interest .....................................................................185 Compound Interest...............................................................186 Amortization ..............................................................................186 Discounted Cash Flow Analysis .................................................... 187 Net Present Value ................................................................ 187 Internal Rate of Return .......................................................... 187 Calendar .................................................................................. 187 Actual Day Basis ................................................................. 187
10 Contents File name: hp 12c_users guide_English_HDPMBF12E44 Page: 10 of 209 Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm 30/360 Day Basis.............................................................. 187 Bonds ...................................................................................... 188 Depreciation ............................................................................. 189 Straight-Line Depreciation..................................................... 189 Sum-of-the-Years-Digits Depreciation ...................................... 189 Declining-Balance Depreciation ............................................ 190 Modified Internal Rate of Return................................................... 190 Advance Payments ..................................................................... 190 Interest Rate Conversions ............................................................ 191 Finite Compounding ............................................................ 191 Continuous Compounding.................................................... 191 Statistics ................................................................................... 191 Mean ................................................................................ 191 Weighted Mean ................................................................. 191 Linear Estimation ................................................................. 191 Standard Deviation ............................................................. 192 Factorial ............................................................................ 192 The Rent or Buy Decision ............................................................ 192 Appendix E: Battery, Warranty, and Service Information 193 Battery ..................................................................................... 193 Low-Power Indication .................................................................. 193 Installing a New Battery ...................................................... 193 Verifying Proper Operation (Self-Tests) .......................................... 194 Warranty.................................................................................. 196 Service ..................................................................................... 197 Regulatory Information ............................................................... 199 Temperature Specifications.......................................................... 199 Noise Declaration ..................................................................... 199 Disposal of Waste Equipment by Users in Private Household in the European Union ........................................................................ 200 Appendix F: United Kingdom Calculations .................... 201 Mortgages................................................................................ 201 Annual Percentage Rate (APR) Calculations ................................... 202 Bond Calculations ..................................................................... 202 Function Key Index ...................................................... 203 Programming Key Index .............................................. 206 Subject Index.............................................................. 208