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Unformatted text preview: Chapter 7: Using Other Worksheets The nominal interest rate (NOM) is the interest rate per compounding
period multiplied by the number of compounding periods per year.
The annual effective interest rate (EFF) is the compound annual interest
rate that you actually earn for the period of time stated. Procedure: Using the Interest Conversion Worksheet
1. Press to select the worksheet. NOM is displayed, along with the previous value. 2. Press to clear the worksheet. 3. Enter a value for the known interest rate, either NOM or EFF.
To enter a value for a known variable, press
or
until the variable
label you want (NOM or EFF) is displayed. Then key in a value and press
.
4. Press until C/Y is displayed. If necessary, key in a value for number of
compounding periods per year and press
.
5. Compute a value for the unknown interest rate.
To compute a value for the unknown variable, press
or
until the
variable label you want (NOM or EFF) is displayed. Then press
.
The calculator computes and displays the value. Example: Interest Conversion
A bank is offering a certificate that pays a nominal interest rate of 15% with
quarterly compounding. What is the annual effective interest rate?
Procedure Keystrokes Display Select Interest
Conversion worksheet. NOM (old contents) Clear worksheet. NOM = 0.00
15.00 Enter nominal interest
rate. 15 NOM = Enter number of
compounding periods
per year. 4 C/Y = Compute annual
effective interest rate. EFF = 4.00
15.87 A nominal interest rate of 15% compounded quarterly is equivalent to an
annual effective interest rate of 15.87%. Chapter 7: Using Other Worksheets 61 The Date Worksheet
Press
to access the Date worksheet. This worksheet can help you
find the number of days between two dates. You can also calculate a date
and day of the week based on a starting date and a specified number of
days. Date Worksheet Labels
Label Meaning Type of Variable DT1 Date 1 Enter/compute DT2 Date 2 Enter/compute DBD Days between dates Enter/compute ACT* Actual/actual daycount method Setting 360...
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This homework help was uploaded on 04/03/2014 for the course ECON 203 taught by Professor Petry during the Summer '09 term at University of Illinois, Urbana Champaign.
 Summer '09
 PETRY

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