# U converting between the nominal interest rate and

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Unformatted text preview: n=– PMT • A deposit is indicated by a plus sign (+), while a withdrawal is indicated by a minus sign (–). u Converting between the nominal interest rate and effective interest rate The nominal interest rate (I% value input by user) is converted to an effective interest rate ( I%') when the number of installments per year (P/Y ) is different from the number of compound interest calculation periods ( C/Y ). This conversion is required for installment savings accounts, loan repayments, etc. { I%' = (1+ [C / Y ] } [P / Y ] I% ) –1 ×100 100 × [C / Y ] P/Y : installment periods per year C/Y : compounding periods per year When calculating n, PV, PMT, FV The following calculation is performed after conversion from the nominal interest rate to the effective interest rate, and the result is used for all subsequent calculations. i = I%'÷100 When calculating I% After I% is obtained, the following calculation is performed to convert to I%'. { I%' = (1 + [P / Y ] } I% [C / Y ] ) –1 ×[C / Y ]×100 100 P/Y : installment periods...
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