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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 day-count 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.

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