Interest Conversion Menu
To open the Interest Conversion menu (Iconv) press [Shift] [IConv]. To reset the variables to their default values, from anywhere inside the menu, press [Shft][Reset]. With Iconv displayed, press [INPUT] to reset, or [ON/CE] to cancel.
Interest Conversion Menu Items
- Nom%= The stated annual interest rate compounded periodically, such as 18% compounded monthly.
- Eff%= The rate, that compounded only once, that is, annually, would produce the same final value as the nominal rate.
- P/YR= Payments or compounding periods per year. Default is 12.
Here is an example: Open the Iconv menu, press [Shift][IConv] Nom%= displays on the top line, and the current value assigned to the nominal interest rate is displayed on the bottom line. At this screen, enter 12 [INPUT] to enter a new current value for the nominal rate. Press [Down Arrow] followed by [=] to calculate the current value for the effective rate, which should be 12.68.
Another example: Using the Iconv menu, find the effective rate of a 36.5% nominal rate compounded daily. Open the Iconv menu, press [Shift][IConv] Nom%= displays on the topline, and the current value assigned to the nominal interest rate isdisplayed on the bottom line. At this screen, enter 36.5 [INPUT] toenter a new current value for the nominal rate. Press [Up Arrow] scrolls to payments per year, ‘P/YR’ (default value is 12) enter 365 [INPUT] as the current value for the number of compounding periods or payments per year. Press [Up Arrow] scrolls to the variable ‘Eff%=’ for the effective rate and press [=]. The HP 20b will return the effective rat value of 44.03. To summarized, The 36.5% nominal rate compounded daily equals an effective rate of 44.03%.