HP 12c Owners Manual

							 
11 
File name: hp 12c_users guide_English_HDPMBF12E44  Page: 11 of 209   
Printered Date: 2005/7/29    Dimension: 14.8 cm x 21 cm
 
Making Financial 
Calculations Easy 
Before you begin to read through this handbook, let’s take a look at how easy 
financial calculations can be with your hp 12c. While working through the 
examples below, don’t be concerned about learning how to use the calculator; 
we’ll cover that thoroughly beginning with Section 1. 
Example 1:
 Suppose you want to ensure that you can finance your daughter’s 
college education 14 years from today. You expect that the cost will be about 
$6,000 a year ($500 a month) for 4 years. Assume she will withdraw $500 at the 
beginning of each month from a savings account. How much would you have to 
deposit into the account when she enters college if the account pays 6% annual 
interest compounded monthly?
 
This is an example of a compound interest calculation. All such problems involve at 
least three of the following quantities: 
z n: the number of compounding periods. 
z i: the interest rate per compounding period. 
z PV: the present value of a compounded amount. 
z PMT: the periodic payment amount. 
z FV: the future value of a compounded amount. 
In this particular example: 
z n is 4 years × 12 periods per year = 48 periods. 
z i is 6% per year ÷ 12 periods per year = 0.5% per period. 
z PV is the quantity to be calculated — the present value when the financial 
transaction begins. 
z PMT is $500. 
z FV is zero, since by the time your daughter graduates she (hopefully!) will 
not need any more money. 
To begin, turn the calculator on by pressing the ;
 key. Then, press the keys 
shown in the Keystrokes
 column below.
* 
                                                 
* If you are not familiar with the use of an hp calculator keyboard, refer to the description on 
pages 16 and 17.  
						

							12  Making Financial Calculations Easy 
 
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Note: A battery symbol (¼) shown in the lower-left corner of the display 
when the calculator is on signifies that the available battery power is nearly 
exhausted. To install new batteries, refer to Appendix E. 
 
The calendar functions and nearly all of the financial functions take some 
time to produce an answer. (This is typically just a few seconds, but the ¼, 
!, L, and S functions could require a half-minute or more.) During 
these calculations, the word running flashes in the display to let you know 
that the calculator is running. 
Keystrokes Display  
fCLEARHf2 
0.00 Clears previous data inside the 
calculator and sets display to show 
two decimal places. 
4gA 
48.00 Calculates and stores the number of 
compounding periods. 
6gC 
0.50 Calculates and stores the periodic 
interest rate. 
500P 
500.00 Stores periodic payment amount. 
g× 
500.00 Sets payment mode to Begin. 
$ 
-21,396.61 Amount required to be deposited.*  
Example 2:
 We now need to determine how to accumulate the required deposit 
by the time your daughter enters college 14 years from now. Let’s say that she has 
a paid-up $5,000 insurance policy that pays 5.35% annually, compounded 
semiannually. How much would it be worth by the time she enters college?
 
In this example, we need to calculate FV, the future value. 
Keystrokes Display  
fCLEARG 
-21,396.61 Clears previous financial data inside 
the calculator. 
14\2µn 
28.00 Calculates and stores the number of 
compounding periods. 
5.35\2z¼ 
2.68 Calculates and stores the periodic 
interest rate. 
5000Þ$ 
-5,000.00 Stores the present value of the 
policy. 
M 
10,470.85 Value of policy in 14 years. 
                                                 
* Don’t be concerned now about the minus sign in the display. That and other details will be 
explained in Section 3.  
						

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Example 3:
 The preceding example showed that the insurance policy will 
provide about half the required amount. An additional amount must be set aside to 
provide the balance (21,396.61 – 10,470.85 = 10,925.76). Suppose you make 
monthly payments, beginning at the end of next month, into an account that pays 
6% annually, compounded monthly. What payment amount would be required in 
order to accumulate $10,925.75 in the 14 years remaining?
 
Keystrokes Display  
fCLEARG  
10,470.85 Clears previous financial data 
inside the calculator. 
14gA 
168.00 Calculates and stores the number of 
compounding periods. 
6gC 
0.50 Calculates and stores the periodic 
interest rate. 
10925.76M 
10.925.76 Stores the future value required. 
g 
10.925.76 Sets payment mode to End. 
P 
–41.65 Monthly payment required. 
Example 4:
 Suppose you cannot find a bank that currently offers an account 
with 6% annual interest compounded monthly, but you can afford to make $45.00 
monthly payments. What is the minimum interest rate that will enable you to 
accumulate the required amount?
 
In this problem, we do not need to clear the previous financial data inside the 
calculator, since most of it is unchanged from the preceding example. 
Keystrokes Display  
45ÞP 
–45.00 Stores payment amount. 
¼ 
0.42 Periodic interest rate. 
12§ 
5.01 Annual interest rate. 
This is only a small sampling of the many financial calculations that can now be 
done easily with your hp 12c. To begin learning about this powerful financial tool, 
just turn the page. 
						

							 
 
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Part I 
Problem Solving 
						

							 
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  Section 1 
Getting Started 
Power On and Off 
To begin using your hp 12c, press the ;
 key*. Pressing ;
 again turns the 
calculator off. If not manually turned off, the calculator will turn off automatically 8 
to 17 minutes after it was last used. 
Low-Power Indication 
A battery symbol (¼
) shown in the upper-left corner of the display when the 
calculator is on signifies that the available battery power is nearly exhausted. To 
replace the batteries, refer to Appendix E. 
The Keyboard 
Many keys on the hp 12c perform two or even three functions. The primary 
function of a key is indicated by the characters printed in white on the upper face 
of the key. The alternate function(s) of a key are indicated by the characters 
printed in gold above the key and the characters printed in blue on the lower face 
of the key. These alternate functions are specified by pressing the appropriate 
prefix key before the function key: 
 
z To specify the alternate function printed in gold
above a key, press the gold prefix key (f), then
press the function key. 
z To specify the primary function printed on the upperface of a key, press the key alone. 
z To specify the alternate function printed in blue on the
lower face of a key, press the blue prefix key (g),
then press the function key. 
                                                 
* Note that the ; key is lower than the other keys to help prevent its being pressed 
inadvertently.  
						

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Throughout this handbook, references to the operation of an alternate function 
appear as only the function name in a box (for example, “The L
 function …”). 
References to the selection of an alternate function appear preceded by the 
appropriate prefix key (for example, “Pressing fL
 …”). References to the 
functions shown on the keyboard in gold under the bracket labeled “CLEAR” 
appear throughout this handbook preceded by the word “CLEAR” (for example, 
“The CLEARH
 function …” or “Pressing f
CLEARH
 …”). 
If you press the f
 or g
 prefix key mistakenly, you can cancel it by pressing 
f
CLEARX
. This can also be pressed to cancel the ?
, :
, and i
 keys. 
(These keys are “prefix” keys in the sense that other keys must be pressed after 
them in order to execute the corresponding function.) Since the X
 key is also 
used to display the mantissa (all 10 digits) of a displayed number, the mantissa of 
the number in the display will appear for a moment after the X 
key is released. 
Pressing the f
 or g
 prefix key turns on the corresponding status indicator — f
 
or g
 — in the display. Each indicator turns off when you press a function key 
(executing an alternate function of that key), another prefix key, or f
CLEARX
. 
Keying in Numbers 
To key a number into the calculator, press the digit keys in sequence, just as if you 
were writing the number on paper. A decimal point must be keyed in (using the 
decimal point key) if it is part of the number unless it appears to the right of the last 
digit. 
Digit Separators 
As a number is keyed in, each group of three digits to the left of the decimal point 
is automatically separated in the display. When the calculator is first turned on 
after coming from the factory — or after Continuous Memory is reset — the 
decimal point in displayed numbers is a dot, and the separator between each 
group of three digits is a comma. If you wish, you can set the calculator to display 
a comma for the decimal point and a dot for the three-digit separator. To do so, 
turn the calculator off, then press and hold down the .
 key while you press ;
. 
Doing so again sets the calculator to use the original digit separators in the 
display.  
Negative Numbers 
To make a displayed number negative — either one that has just been keyed in or 
one that has resulted from a calculation — simply press Þ
 (change sign) . When 
the display shows a negative number — that is, the number is preceded by a 
minus sign — pressing Þ
 removes the minus sign from the display, making the 
number positive. 
  
						

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Keying in Large Numbers 
Since the display cannot show more than 10 digits of a number, numbers greater 
than 9,999,999,999 cannot be entered into the display by keying in all the digits 
in the number. However, such numbers can be easily entered into the display if the 
number is expressed in a mathematical shorthand called “scientific notation.” To 
convert a number into scientific notation, move the decimal point until there is only 
one digit (a nonzero digit) to its left. The resulting number is called the “mantissa” 
of the original number, and the number of decimal places you moved the decimal 
point is called the “exponent” of the original number. If you moved the decimal 
point to the left, the exponent is positive; if you moved the decimal point to the 
right (this would occur for numbers less than one), the exponent is negative. To key 
the number into the display, simply key in the mantissa, press Æ
 (enter exponent), 
then key in the exponent. If the exponent is negative, press Þ
 after pressing 
Æ
. 
For example, to key in $1,781,400,000,000, we move the decimal point 12 
places to the left, giving a mantissa of 1.7814 and an exponent of 12: 
Keystrokes Display  
1.7814Æ12 
1.7814  12 1,781,400,000,000 entered in 
scientific notation. 
Numbers entered in scientific notation can be used in calculations just like any 
other number. 
The CLEAR Keys 
Clearing a register or the display replaces the number in it with zero. Clearing 
program memory replaces the instructions there with gi
00. There are several 
clearing operations on the hp 12c, as shown in the table below: 
Key(s) Clears: 
O 
Display and X-register. 
fCLEAR²  Statistics registers (R1 through R6), stack registers, and 
display. 
fCLEARÎ  Program memory (only when pressed in Program mode). 
fCLEARG Financial registers. 
fCLEARH  Data storage registers, financial registers, stack and LAST X 
registers, and display.  
						

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Simple Arithmetic Calculations 
Any simple arithmetic calculation involves two numbers and an operation — 
addition, subtraction, multiplication, or division. To do such a calculation on your 
hp 12c, you first tell the calculator the two numbers, then tell the calculator the 
operation to be performed. The answer is calculated when the operation key 
(+
,-
,§
, or z
) is pressed. 
The two numbers should be keyed into the calculator in the order they would 
appear if the calculation were written down on paper left-to-right. After keying in 
the first number, press the \
 key to tell the calculator that you have completed 
entering the number. Pressing \
 separates the second number to be entered 
from the first number already entered. 
In summary, to perform an arithmetic operation: 
1.  Key in the first number. 
2. Press \ to separate the second number from the first. 
3.  Key in the second number. 
4. Press +,-,§, or z to perform the desired operation. 
For example to calculate 13 ÷ 2, proceed as follows: 
Keystrokes Display  
13 
13. Keys the first number into the 
calculator. 
\ 
13.00 Pressing \
 separates the second 
number from the first. 
2 
2. Keys the second number into the 
calculator. 
z 
6.50 Pressing the operation key calculates 
the answer. 
Notice that after you pressed \
, two zeroes appeared following the decimal 
point. This is nothing magical: the calculator’s display is currently set to show two 
decimal places of every number that has been entered or calculated. Before you 
pressed \
, the calculator had no way of knowing that you had completed 
entering the number, and so displayed only the digits you had keyed in. Pressing 
\
 tells the calculator that you have completed entering the number: it terminates 
digit entry. You need not press \
 after keying in the second number because 
the +
,-
,§
 and z
 keys also terminate digit entry. (In fact, all keys terminate 
digit entry except for digit entry keys — digit keys, .
, Þ
,  
and Æ
 — and 
prefix keys — f
, g
, ?
, :
, and (
.)  
						

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Chain Calculations 
Whenever the answer has just been calculated and is therefore in the display, you 
can perform another operation with this number by simply keying in the second 
number and then pressing the operation key: you need not press \ 
to separate 
the second number from the first. This is because when a number is keyed in after 
a function key (such as +
,-
,§
, z
, etc.) is pressed, the result of that prior 
calculation is stored inside the calculator — just as when the \
 key is pressed. 
The only time you must press the \
 key to separate two numbers is when you 
are keying them both in, one immediately following the other.  
The hp 12c is designed so that each time you press a function key in RPN mode, 
the calculator performs the operation then — not later — so that you see the results 
of all intermediate calculations, as well as the “bottom line.” 
Example:
 Suppose you’ve written three checks without updating your checkbook, 
and you’ve just deposited your paycheck for $1,053.00 into your checking 
account. If your latest balance was $58.33 and the checks were written for 
$22.95, $13.70, and $10.14, what is the new balance?
 
Solution: 
When written down on paper, this problem would read 
58.33 – 22.95 – 13.70 – 10.14 + 1053 
Keystrokes Display  
58.33 
58.33 Keys the first number. 
\ 
58.33 Pressing \
 separates the second 
number from the first. 
22.95 
22.95 Keys in the second number. 
- 
35.38 Pressing -
 subtracts the second 
number from the first. The calculator 
displays the result of this calculation, 
which is the balance after subtracting 
the first check. 
13.70 
13.70 Keys in the next number. Since a 
calculation has just been performed, 
do not press \
; the next number 
entered (13.70) is automatically 
separated from the one previously in 
the display (35.38).