Using HP 10Bii to do semiannual AND continuous compounding

Using HP 10Bii to do semiannual AND continuous compounding...

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Using HP 10-BII for Compounding More Frequently Than Annually (Using Example, Pg. 161) Semiannual Compounding: [ ] [C ALL] 2 P/YR 100 [PV] 2 [N] [N] ( or 2 [N] ) 8 [I/YR] Press [FV] to get -116.99, which is $116.99 Quarterly Compounding: (think ahead: should I have more or less in my account if I calculate and add interest more often?) [ ] [C ALL] 4 P/YR 100 [PV] 2 [N] [N] ( or 2 [N] ) 8 [I/YR] Press [FV] to get -117.17, which is $117.17 (slightly more with quarterly compounding) Continuous Compounding Step 1 – Enter interest rate in decimal form then multiply it by number of years
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Unformatted text preview: Step 2 raise natural number e to that power by pressing [ e x ] key (its the 1 key shifted) Step 3 multiply by present value to get the future value Example, bottom of page 162, showing these steps: Key in: 0.08 x 2 = Press [ e x ] key to get 1.17351 Multiply: 100 = You should get 117.351, or $117.35 Note: to get the effective annual rate of 8% continuously compounded, enter: 0.08 [ e x ] 1 = 0.0833 or 8.33%. This is the fastest money can grow, given an 8% stated, or nominal, interest rate....
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