1 Financial Arithmetic Basics

HP calculator example
What is the net present value of the following cashflows using an interest rate of
10% per annum paid quarterly?
$100 at the end of each quarter for 5 years.
$1,000 at the end of the fifth year in addition to the $100.

HP12C
20 n
2.5 i
100 PMT
1000 FV
PV

HP19BII (RPN mode)

HP19BII (algebraic)

Select FIN menu

Select TVM menu
20 N
2.5 I%YR
100 PMT
1000 FV

Select FIN menu

Select TVM menu
20 N
2.5 I%YR
100 PMT
1000 FV

PV

PV

Answer: $2,169.19

In the example above, instead of entering the interest rate per period as
2.5 percent, it is possible with the HP19BII to enter the interest rate per year
HP19BII (RPN mode)
Select FIN menu
Select TVM menu
OTHER 4 P/YR EXIT
20 N
10 I%YR
100 PMT
1000 FV
PV

HP19BII (algebraic)
Select FIN menu
Select TVM menu
OTHER 4 P/YR EXIT
20 N
10 I%YR
100 PMT
1000 FV
PV

as 10 percent and the number of payments per year as 4 as follows. This

merely avoids dividing by 4.
The built-in TVM functions can be used when all the cashflows are the same
except for the initial cashflow now or present value, and the additional final
cashflow or future value. For bonds and swaps, this is often the case. In cases
where the cashflows are irregular however, an alternative function must be used.

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