Using HP 10bII for Interest Rate Conversions
Which interest rate would give you better returns as an investor?
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Enter 4.25 and press [Shift] [NOM%]
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Enter 4 and press [Shift] [P/YR] (4 times a year)
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[Shift] [EFF%] 4.32 (compounded annually or 12 months)
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Enter 4.15 and press [Shift] [NOM%]
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Enter 12 and press [Shift] [P/YR]
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Press [Shift] [EFF%] 4.23 (compounded annually or 12 months)
The second option 4.25% (Quarterly), has better return as an investor.
Calculate equivalent semiannual rate?
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Enter 5 and press [Shift] [NOM%]
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Enter 12 and press [Shift] [P/YR] (compounded annually)
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Press [Shift] [EFP%]
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Display 5.12, and now we need to work backwards
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Enter 2 and press [Shift] [P/YR] (set to semi annual or twice a year)
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Press [Shift] [NOM%]
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Display 5.05 (is the same as compounded semi annually)
Answer is 5.05% for semiannual rate.