HEWLETT-PACKARD

HP- 12C
TRAINING GUIDE
 A caciars

HP-12C

Training Guide

April 1984

00012-90022 Rev. B

Printed in U.S.A. © Hewlett-Packard Company 1982

"Explain all that," said the Mock Turtle.
"No, no! The adventures first," said the Gryphon
in an impatient tone: "explanations take such a
dreadful time."

Lewis Carroll
 Contents

Introduction .

Chapter —_
: Getting Started . . 1-2

Chapter : Percentage and Calendar Functions . 2-18

Chapter : The Time Value of Money . 3-34

Chapter : Additional Financial Functions 4-60

Chapter : Depreciation Calculations . 5-80

Chapter : Bond Calculations . 6-90

Chapter ¢ What is a Program? 7-100

Chapter : Programming Basics 8-108

Chapter 9: Writing a Second Program 9-120

Chapter 10: Editing a Program . 10-134

Chapter 11: Decisions . 11-146

Chapter 12: Where Do I Go From Here? . . 12-162

Index 164
 Introduction

The HP-12C Training Guide consists of twelve chapters designed to give

you the knowledge you need to feel at ease with your calculator. The
more confidence you have in your HP-12C calculator and the better you
understand it, the more profitably you will use it. Remember, YOU
CANNOT HURT THE HP-12C, even by pressing improper key sequences.

Each chapter is followed by a summary and a review test. The answer to

each question is available so that you can check your work. These
summaries and tests will help fix in your mind the new ideas presented
in each chapter. They will also point out topics requiring more study.

After reading through this training guide and working the examples it
contains, you will be able to:

* Calculate mortgage payments

* Calculate loan amounts

* Calculate balloon payments

# Calculate interest rates and yields

* Do amortization schedules

* Determine an investment's internal rate of return

* Write and run a program

And much more.

Don't be afraid of the HP-12C's programming capabilities. A program is

nothing more than a sequence of manual keystrokes that is remembered by
the calculator. The HP-12C is so easy to program and use that it requires
no prior programming experience. The calculator performs the drudgery,
saving time, and leaving your mind free for more creative work.

We want you to feel comfortable with your HP-12C and we want to show
you how easy it is to use. So turn the page and let's begin.
 Chapter 1

Getting Started

Preview

In Chapter 1 you will:

* Key numbers into the HP-12C.

* Perform simple arithmetic and chain calculations.

* Store numbers for use at a later time.

* Discover alternate functions.

Relax, you cannot hurt the HP-12C, even by pressing improper key
seguences.

As you complete each of the following steps, check it off so that you
can easily find your place.

. To begin, press [ON]. If the display does not show 0.00, press [CLx]
and you'll be ready to begin.¥ (More about [CLx] later.) Pressing
[ON] again turns the calculator off.

. If you are not using the calculator, the HP-12C will automatically
turn itself off in about 10 minutes to save the batteries. But don't
worry - any information you have keyed into the calculator is saved in
its Continuous Memory. Simply press [ON] and continue.

- -

If you do not see two zeroes to the right of the decimal point press
and release the gold [f] key, and then press the 2 key. If a comma
is placed where the decimal point should be, turn the calculator off,
then press and hold down the [.] key while you press and release [ON].

1-2
Keying in Numbers

0 3. The keys on the right half of the keyboard are the digit entry and
arithmetic keys.

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Digit Entry Keys

Some Key Locations

Figure 1

() 4. Key in the number 1234567.89, pressing the digit entry keys in the
same sequence that you would write the number on a piece of paper.
Don't forget to key in the decimal point. If you make a mistake
kKeying in this number, press [CLx] and try again.

() 5. The display should look like this:

1,234,567.89

Notice the commas which are now in the display. The HP-12C auto-
matically adds commas to make reading large numbers easy.

Press [CHS] (change sign) and see:

-1,234,567.89

The display now contains a negative number. Press [CHS] again to

remove the minus sign, making the number positive.

1-3
0 8. Now clear the display by pressing [CLx] and see:

0.00

Clear X ([CLx]) clears only the display (also called the X-register).
There are several other clearing functions in the HP-12C which you
will learn about later.

Simple Arithmetic

0 9. Press the following keys to add the numbers 13 and 8.

Keystrokes Display

13 13.

[ENTER] 13.00

8 8.

[+] 21.00 The answer!

()10. Simple arithmetic involves two numbers and an operation -- addition,
subtraction, multiplication, or division. To do such a calculation
on your HP-12C, first key the two numbers into the calculator, and
then tell the calculator the operation to be performed.

0O11. The two numbers are separated by the [ENTER] key. After keying in
the first number, press [ENTER] to tell the calculator that you have
completed "entering" the number.

0O12. To perform an arithmetic operation:

1. Key in the first number.

2. Press [ENTER] to separate the second number from the first.
3. Key in the second number.
4. Press [+], [-1, [x], or [/1* to perform the operation.
()13. Notice that you don't have to press [CLx] before keying in the next
example. The first number you will press in step 14 (the number T)
will move the old number automatically and at the same time put a 7 in
the display.

()14, Example: Add the numbers -7 and 9.

The divide key is represented by [/].

1-4
 Keystrokes Display

T 7. The first number is keyed into

the calculator.

[CHS] -7. The first number is negative.

[ENTER] -7.00 The first number is separated

from the second -- digit entry
is terminated.

9 9. The second number is keyed in.

[+] 2.00 The answer is calculated.

0O15. Now try the next example. Calculate 15 / 3 as follows:

Keystrokes Display

15 15. The first number is keyed

into the calculator.

[ENTER] 15.00 The first number is separated

from the second -- digit entry
is terminated.

3 3. The second number is keyed in.

(/1] 5.00 The answer is calculated.

()16. Press the following keys to subtract 2 from the previous result.
Keystrokes Display

2 2. The second number is keyed in.

(-1 3.00 The answer is calculated.

Once an answer has been calculated and is in the display, you can
perform another operation with this number by keying in the second
number and pressing the operation key.

0O17. Notice that you did not press [ENTER] to separate the second number
from the first. The reason is that the result of the prior calculation
is stored inside the calculator.

()18. The only time you must press the [ENTER] key to separate two numbers
is when you are keying them both in, one immediately following the
other.

1-56
()19. The HP-12C is designed so that each time you press an arithmetic
key ([+]1, [-1, [x], or [/1), the calculator performs the
operation immediately --- not later --- so that you see the result of
each calculation as it is performed.

Chain Calculations

()20. Suppose you've written three checks without updating your checkbook,
and you've just deposited your paycheck for $1057.30 into your
checking account. If your last balance was $107.45 and the checks were
written for $21.98, $30.24, and $9.16, what is the new balance?

Solution: When written down on paper, this problem would read:

107.45 - 21.98 - 30.24 - 9.16 + 1057.30 = ?

Keystrokes Display

107.45 107.45 The first number is keyed in.

[ENTER] 107.45 The first number is separated

from the second.

21.98 21.98 The second number is keyed in.

[-] 85.47 Pressing [-] subtracts the

second number from the first.
The result is the balance
after subtracting the first
check.

30.24 30.24 The next number is keyed in.

Since a calculation has just
been performed, it is not
necessary to press [ENTER].

[-] 55.23 The amount of the second check

is subtracted. The display
shows the new balance.

9.16 [-] 46.07 The next check is keyed in

and subtracted from the
previous balance.

1057.30 [+] 1,103.37 The paycheck deposited is

added to the previous balance.
The current balance appears
in the display.

1-6
021. Now let's try a different type of calculation --- one which involves
multiplying groups of two numbers and then adding the results.
This type of calculation would be required to total an invoice that
lists several items with different quantities and different
prices. Consider the calculation of ( 3 x5 ) + (7 x 6 ). If you
were doing this calculation on paper, you would do the multiplication
in the first parentheses (:), then the multiplication in the second
parentheses 65, and then add the two results together for the final
result :
@ @
(3/x/5>+<7 %)
15 + L2
®
57

()22. The HP-12C calculates the answer in the same way:

Keystrokes Display

3 [ENTER] 5 [x] 15.00 The numbers in the first

parentheses are multiplied.

7 [ENTER] 6 [x] u2.00 The numbers in the second

parentheses are multiplied.

[+] 57.00 The two multiplication

results are added for the
final result. (The HP-12C
remembered the 15.00.)

023. Here's another problem:

25 - 17

13 + 19

Keystrokes Display

25 [ENTER] 17 [-] 8.00 The numbers in the top

portion of the fraction
are subtracted.

13 [ENTER] 19 [+] 32.00 The numbers in the bottom

portion of the fraction
are added.

(/] 0.25 The two previous results are

divided to obtain the answer.

1-7
Storage Registers

()24. Numbers, or data, in the HP-12C are stored in memories called "storage
reglsters" or, simply, "registers." Four special registers are used for
storing numbers during calculations. (You have been using these
registers, called "stack registers," in the previous examples.)

()25. In addition to these registers, into which numbers are stored auto-
matically, up to 20 "data storage registers" are available for you to
store numbers. These data storage registers are designated Register
0 (RO) through Register 9 (R9) and Register .0 (R.0) through Register
.9 (R.9). Store ([STO]) and recall ([RCL]) will be used to access
these storage registers.

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Locations of [STO] and [RCL]

Figure 2

()26. Still other storage registers -- the "financial registers" -- are

available, although they are usually used only for financial
calculations. You will learn about the financial registers ([n],
(i1, [pPv]1, [PMT], [FV]) in Chapter 3.

0a7. Perform the following operations:

Keystrokes Display

146 146.

[STO] 5 146.00 146 is stored in R5.

321 321.

[sT0] [.1 3 321.00 321 is stored in R.3.

1-8
 To store a number showing in the display into a data storage register:

1. Press [STO] (store).

2. Key in the register number:
0 through 9 or [.] O through [.] 9.

()28. Now press these keys:

Keystrokes Display

[RCL] 5 146.00 146 is recalled from R5.

[(rRcL] [.] 3 321.00 321 is recalled from R.3.

To recall a number from a storage register into the display, press

[RCL] (recall), and then key in the appropriate register number. This
copies the number from the storage register into the display; the
number remains unaltered in the storage register until a new number is
stored there, until the register is added to or subtracted from, or
until the storage registers are cleared. And, when a value is recalled
from a storage register, the number previously in the display is
automatically held in the calculator --- ready for a calculation.

()29. A single storage register can be cleared by storing zero in it. For
example, clear register 5.

Keystrokes Display

0 [STO] 5 0.00 Zero is stored in R5.

[(RCL] [.1 3 321.00 Register [.] 3 remains

undisturbed.

()30. All registers may be cleared at one time. Press the gold [f] key then
release it. Next press [CLx] and release it. These keystrokes are
normally written [f] CLEAR [REG]. The word CLEAR in gold above the
five bracketed keys means that when the gold [f] key is pressed (and
released) before one of the bracketed keys is pressed, the indicated
registers (or PREFIX) --- printed in gold above each key --- are (is)
cleared.

1-9
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Location of [f] CLEAR [REG]

Figure 3

()31. The display now shows:

0.00

Notice that you cleared all of the registers, including the stack
registers (see step 24). Since the display is one of the four stack
registers, the contents of the display, 321.00, was cleared, leaving
0.00.

Alternate Functions

()32. This is probably the first time that you have used [f] --- a prefix key.
Many keys on the HP-12C perform two or three different functions. The
main function of a key is printed in white on the face of the key.
The alternate (or shifted) functions of a key are printed in gold above
the key and in blue on the lower face of the key. These alternate
(shifted) functions are specified by pressing and releasing the appro-
priate prefix key (either the gold [f] key or the blue [g] key) before
pressing the function key.
 * To specify the function in gold,
press and release the gold prefix key
([f]) before the function key.

* To specify the function printed

on the face of the key, just press
the key.

To specify the function in blue,

press and release the blue prefix key
Figure 4 ([g]) before the function key.

()33. Press [f] and see:

0.00

Pressing the [f] prefix key turns on an "annunciator" -- f -- in the

bottom of the display. Likewise, a "g" appears in the bottom of the
display when the [g] prefix key is pressed.

()34. If you press the [f] or [g] prefix key by mistake, you can easily
cancel it by using the clear prefix function. Press [f] CLEAR [PREFIX]
and first see:

0000000000

and then, in about one second, see:

0.00

What you saw briefly was the complete contents of the display, all ten
digits. This is useful in some work, but you won't be using this
feature in this course. If you're curious to learn more about this ten
digit display, see Mantissa Display Format in Section 5 of your HP-12C
Owner's Handbook and Problem-Solving Guide.

1-11
Chapter 1 Summary

¥ The digit entry Keys are used to key in numbers just as you would write
them down. Reference: Page 1-3, steps 3-4.

* [CHS] is used to key in a negative number. Reference: Page 1-3,

step 7.

* [CLx] clears the display. Reference: Page 1-4, step 8.

* [ENTER]: The [ENTER] key is used to separate two numbers.

Reference: Page 1-4, steps 10-12.

* When an arithmetic key is pressed, the HP-12C performs the operation

immediately. Reference: Page 1-6, step 19.

¥ The results of prior calculations are stored inside the calculator and
do not have to be re-entered. Reference: Page 1-5, steps 17-18.

¥ [STO]: Numbers are stored in storage registers with the [STO] key.
Reference: Page 1-8, steps 24-27.

¥ [RCL]: Numbers are recalled from storage registers with the [RCL] key.
Reference: Page 1-9, steps 28-29.

*¥ Twenty data storage registers designated RO - R9 and R.0 - R.9 are

available. Reference: Page 1-8, step 25.

¥ [f] CLEAR [REG] clears all storage registers.

Reference: Pages 1-9 - 1-10, steps 30-31.

* The [f] and [g] prefix keys are used to access the alternate (shifted)
functions on the HP-12C. Reference: Page 1-10, step 32.
Review Test for Chapter 1
The answers are on Page 1-15, immediately following this review test.

A NOTE ABOUT REVIEW TESTS:

All of the review tests are intended to help you learn, not to find out
whether you pass or fail. Make a good effort to solve each problem.
If you get lost, relax. Check the answer, and if the solution does not
seem clear to you, review the referenced step(s) in the chapter and try
the problem again. Make an effort to understand the material in each
chapter before proceeding. Each new chapter builds on the material
presented before, so the more comfortable you feel about each chapter's
material, the easier the next chapter will be.

Show the keystrokes to add 18 and 47.

Keystrokes Display

Show the keystrokes to subtract 13 from -8.

Keystrokes Display

Provide the keystrokes for the following problem:

Keystrokes Display
4, Now show the keystrokes to divide the previous result by 4.

Keystrokes Display

5. Store the result from question #4 in storage register 3 (R3).

Keystrokes Display

6. Store 11.72 in register 1 and 7.3 in register 2.

Keystrokes Display

T. Multiply the value in register 3 by the value in register 1. Then

divide the result by the value in register 2. Show the keystrokes.

Keystrokes Display
Answers to Review Test for Chapter 1

Keystrokes Display Reference

18 [ENTER] 18.00 (Page 1-U4, step 9)

47 [+1] 65.00 (Page 1-4, steps 10-11)

Keystrokes Display Reference

8 [CHS] [ENTER] -8.00 (Pages 1-3 and 1-4, steps 7,

14)

13 [-] -21.00

Keystrokes Display Reference

6.42 [ENTER] 6.42 (Pages 1-5 - 1-6, steps 15-19)

9.83 [x] 63.11

4.51 [/1] 13.99

Keystrokes Display Reference

4 /] 3.50 (Pages 1-5 - 1-6, steps 15-19)

Keystrokes Display Reference

[STO] 3 3-50 (Page 1-8, steps 25-27)

Keystrokes Display Reference

11.72 [STO] 1 11.72 (Page 1-8, steps 25-27)

7.3 [STO] 2 7.30

Keystrokes Display Reference

[RCL] 3 3.50 (Page 1-9, step 28)

[RCL] 1 11.72

1-156
[x] 41.00

[RCL] 2 7.30

(/1 5.62
NOTES
 Chapter 2

Percentage and Calendar Functions

Preview

In Chapter 2 you will:

* Do three types of percentage problems.

* Perform calendar functions.

() 1. The HP-12C has three keys for solving percentage problems: [%]
(percent), [ A%] (percent difference) and [%T] (percent of total).

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Locations of [%], [ a%], and [%T]

Figure 5

Percent

() 2. Find 6% of $250.00.

Keystrokes Display

250 250. The first number (the base

number) is keyed in.

[ENTER] 250.00 Pressing [ENTER] separates

the first number from the
second.
 6 6. The percentage is keyed in.

[%] 15.00 The percentage amount is

calculated.

O 3. To find the percentage of a number:

1. Key in the base number.

2. Press [ENTER].

3. Key in the percentage.

4, Press [%].
Notice that, as with the arithmetic operations, the function happens
immediately when you press the [%] key.

() 4, It is easy to calculate the net amount (the base amount plus or

minus the percentage amount) with your HP-12C. For example, to add
the $15 just calculated to $250.00, press:

Keystrokes Display

[+] 265.00 Net amount.

The calculator holds the base amount inside after calculating a
percentage. This means that you don't need to key in the value
again --- a real convenience.

Example: You are buying a new car which lists for $10,148.00. If
the dealer offers you a 9% discount, how much is the car?

Keystrokes Display

10148 10,148. The base amount is keyed in.

[ENTER] 10,148.00 The base is separated from

the percentage.

9 9. The percentage is keyed in.

(%] 913.32 Amount of discount.

[-1] 9,234.68 Net cost of the car.

() 6. Suppose that there is an additional sales tax of 6% on your net cost.

What is the total cost of the car, including tax?
 Keystrokes Display

6 [%] 554,08 The amount of tax (on

$9,234.68) is calculated.

[+] 9,788.76 The total cost (base

amount - discount + tax).

Percent Difference

0O 7. Yesterday the price of your stock fell from 46 1/2 to 43 per share.
What is the percentage change?

Keystrokes Display

46.5 [ENTER] 46.50 The base number is keyed in

and separated from the second
number .

43 43, The second number is keyed in.

[a%] -7.53 A 7 1/2 percent decrease.

To find the percent difference between two numbers:

1. Key in the base number. ¥

2. Press [ENTER] to separate the second number from the base number.

3. Key in the second number.

4, Press [ a%].

If the second number is greater than the base number, the percent
difference will be positive. If the second number is less than the
base number, the percent difference will be negative. Thus a positive
answer indicates an increase, while a negative answer indicates a
decrease. (This guideline applies when both numbers are POSITIVE.)

Example: You purchase typewriters at $159.95 each wholesale and retail

them for $195.00. What percent is your markup?

If the base number keyed in is the wholesale cost, the percent

difference is called the markup; if the base number keyed in is the
retail cost, the percent difference is called the margin.

2-20
 Keystrokes Display

159.95 [ENTER] 159.95 The base number is keyed in

and separated from the
second number.

195 [ a%] 21.91 Percent markup.

Percent of Total

()10. To purchase that $62,000 lakefront cabin that you've had your eyes on,
a $15,500 down payment is required. What percentage of the price does
your down payment represent?

Keystrokes Display

62000 [ENTER] 62,000.00 The total purchase price is

keyed in and separated.

15500 [%T] 25.00 The down payment is 25% of

the purchase price.

O11. To find what percentage a number is of a total:

1. Key in the total number.

2. Press [ENTER] to separate the total number from the next number.

3. Key in the particular number you wish to convert to a percentage

of the total.

4, Press [%T].

0O12. Example: $5.50 is what percent of $40.00?

Keystrokes Display

40 [ENTER] 40.00 The total is keyed in and

separated from the next
number .

5.5 [%T] 13.75 The percent of total is

calculated.

013. Now here's another percentage problem where the total number must be
calculated.

Example: Last year your company had sales of $34.97 million in

the U.S., $21.33 million in Europe, and $15.29 million in the rest
of the world. What percentage of the total sales occurred in

2-21
 Europe?

Keystrokes Display

34.97 [ENTER] 34.97 The first number is keyed

in and separated from the
second.

21.33 [+] 56.30 The second number is added.

15.29 [+] 71.59 The third number is added

to obtain the total sales.

21.33 21.33 21.33 is keyed in to find

what percentage it is of
the number in the display.

[%T] 29.79 Europe had nearly 30% of the

total sales.

()14, To calculate what percentage one number is of a sum of numbers:

1. Calculate the total amount by adding the individual amounts, just

as in an arithmetic calculation.

2. Key in the particular number you wish to convert to a percentage

of that total.

3. Press [%T].

015. To calculate what percent of the total sales in the preceding example
occurred in the U.S. and what percent occurred in the rest of the
world:

Keystrokes: Display:

[CLx] 34.97 [%T] 48.85 The U.S. had about 49% of

the total sales.

[CLx] 15.29 [%T] 21.36 The rest of the world had

a little more than 21% of the
total sales.

2-22
()16. The HP-12C "remembers" in the Y-register* the total amount after a
percent of total is calculated. To calculate what percentage another
amount is of the total:

1. Clear the display by pressing [CLx].

2. Key in that amount.

3. Press [%T] again.

()17. Example: You are considering the purchase of an apartment with

financing structured as follows:

Down payment $25,000.00

First mortgage $114,950.00
Second mortgage $50,000.00

What percentage of the total financing is represented by the down

payment? What percentage is represented by the first mortgage?

Keystrokes Display

25000 [ENTER] 25,000.00 The first number is keyed in

and separated from the second
number.

114950 [+] 139,950.00 The second number is added.

50000 [+] 189,950.00 The third number is added to

obtain the total financing.

25000 [%T] 13.16 The down payment percentage

is calculated.

[CLx] 114950 [%T] 60.52 The first mortgage percentage

is calculated.

The number in the Y-register is the number that was keyed in first in
a two-number operation. For example, 3 [ENTER] 4 would place 3 in the
Y-register and 4 in the X-register (the display). For more information
on the stack registers see Appendix A in the HP-12C Owner's Handbook
and Problem-Solving Guide.

2-23
Calendar Functions

()18. The HP-12C has two keys which perform calendar functions:
[g] [ ADYS] (number of days between dates) and [g] [DATE] (a date
that 1s in the future or past), and two keys to set the calendar
format: [g] [M.DY] (month, day, year) and [g] [D.MY] (day, month, year)

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Locations of [x<>yl, [g]l aDYS], [gl[DATE], [gl[M.DY], and [g][D.MY]

Figure 6

()19. Set the HP-12C to day, month, year format by pressing [gl, releasing,
then pressing [4]. This activates the blue D.MY function on the U4 key.
D.MY will appear in the display.

60.52
D.MY

()20. Now set the HP-12C to month, day, year format by pressing [gl,
releasing, then pressing [5]. D.MY will disappear from the display.
Notice that M.DY does not appear. If you see D.MY in the display,
the HP-12C is in day, month, year mode. If you do not see D.MY in
the display, the HP-12C is in month, day, year mode.

021, From here on, whenever a prefix key is used in a keystroke sequence,
it will be shown like this: [g]l[M.DY] or [g][D.MY] or [f] CLEAR [REG].
Remember that the prefix key ([f] or [gl]) is always pressed, then
released, before the next key is pressed.

2-24
Number of Days Between Dates

()22. How many days were there between September 5, 1981 and December 25, 19817

Keystrokes Display

[g] [M.DY] 60.52 The "month, day, year"

calendar format is set.

9.051981 9.051981 The first date is keyed in.

[ENTER] 9.05 The date is entered into the

calculator. *

12.251981 12.251981 The second date is keyed in.

[g]l [ aDYS] running This word flashes to let you

know that your HP-12C is
calculating.

111.00 In a few moments, the display

shows the actual number of
days.

[x<Oy) 110.00 The display shows the number

of days counted on the basis
of a 30-day month (360 days
per year).

Date Format

()23. To key in a specific date in month, day, year (MM.DDYYYY) format:

1. Set the calendar format to month, day, year ([g]l [M.DY]).

2. Key in the one or two digits of the month.

3. Press the decimal point key ([.1).

y . Key in the two digits of the day. (If the day is one digit, be sure
to key in a zero first; i.e., for February 4, 1981, key in 2.041981)

5. Key in the four digits of the year.

*¥ Although the entire number is "stored" in the calculator, it is being

displayed in the standard display format with two decimal places shown.
To display a different number of decimal places, press [f] followed
by a digit key (0 through 9) specifying the number of decimal places
desired.

2-25
 key in a date in day, month, year (DD.MMYYYY) format:

Set the calendar format to day, month, year ([g] [D.MY]).

Key in the one or two digits of the day.

Press the decimal point key ([.1).

Key in the two digits of the month. (If the month is one digit, be
sure to key in a zero first; i.e., for 14 March 1980, key in
14.031980).

5. Key in the four digits of the year.

()24, Determine the number of days between 13 November 1981 and 5 April 1982,
using the "day, month, year" calendar format.

Keystrokes Display

(g][D.MY] 110.00 The "day, month, year"

calendar format is set.

13.111981 13.111981 The first date is keyed in.

[ENTER] 13.11 The date is entered into the

calculator.

5.041982 5.041982 The second date is keyed in.

[g]l aDYS] 143.00 The actual number of days is

calculated.

()a5. To calculate the number of days between two given dates:

1. Set the calendar format to either [M.DY] or [D.MY].

2. Key in the earlier date (in the chosen calendar format) and press
[ENTER].

3. Key in the later date (in the chosen calendar format) and press
[g]ll ADYS]. The displayed result is the actual number of days.

4, Press [x<>y] to see the number of days on a 30-day month basis

(360 days per year).

()26. How many days (on an actual day basis) were there between October 14,
1981 and March 21, 1982 (month, day, year format)?

2-26
 Keystrokes Display

[g][M.DY] The "month, day, year"

calendar format is set.

10.141981 10.141981 The first date is keyed in.

[ENTER] 10.14 The date is entered into the

calculator.

3.211982 3.211982 The second date is keyed in.

(gl [ aDYs] 158.00 Actual number of days.

Future or Past Dates

027. If you purchase a 120-day option on a piece of land on July 3, 1981,

what is the expiration date?

Keystrokes Display

[g][M.DY] The "month, day year"

calendar format is set.

7.031981 [ENTER] 7.03 The first date is keyed in

and separated from the next
entry.

120 120. The number of days in the

future is keyed in.

[g] [DATE] 10,31,1981 6 The expiration date is

October 31, 1981. The 6
on the right indicates the
6th day of the week -
October 31, 1981 is on a
Saturday. (1 for Monday
through 7 for Sunday.)

()28. To determine the date and day that is a specified number of days
from a given date:

1. Set the calendar format to either [M.DY] or [D.MY].

2. Key in the given date (in the chosen calendar format) and press
[ENTER].

3. Key in the number of days.

2-27
 4. If the other date is in the past, press [CHS].

5. Press [g] [DATE].

The digit at the right of the displayed answer indicates the day of
the week: 1 for Monday through 7 for Sunday.

()29. Example: A 182-day money market certificate matures on March 22, 1982.
On what date was it purchased?

Keystrokes Display

(g][M.DY] The "month, day, year"

calendar format is set.

3.221982 [ENTER] 3.22 The first date is keyed in

and separated from the next
entry.

182 [CHS] -182. The number of days in the

past is keyed in.

[(g][DATE] 9,21,1981 1 The purchase date was

September 21, 1981, a Monday.

2-28
Chapter 2 Summary

¥ [%] is used to find the percentage of a number.

Reference: Pages 2-18 - 2-19, steps 2-6.

[ A%] finds the percent difference between two numbers.

Reference: Page 2-20, steps 7-9.

¥ [%T] finds what percentage a number is of a total.

Reference: Pages 2-21 - 2-23, steps 10-17.

* [g] [D.MY] sets the calendar format to day, month, year.

Reference: Page 2-24, step 19.

* [g] [M.DY] sets the calendar format to month, day, year.

Reference: Page 2-24, step 20.

* [g] [ ADYS] calculates the number of days between two dates.

Reference: Pages 2-25 - 2-26, steps 22-26.

[g] [DATE] determines the date that is a specified number of days from a
given date.
Reference: Pages 2-27 - 2-28, steps 27-29.

2-29
Review Test for Chapter 2

The answers are on Page 2-32, immediately following this review test.

1. What is 6.5% of $120.00?

Keystrokes Display

2. A piece of furniture costs $344 with an additional 3% sales tax.

What is the total cost (price plus sales tax)?

Keystrokes Display

3. If your rent jumps from $280 to $325 per month, what percent is the
increase?

Keystrokes Display

2-30
4, You own Coakley Laboratories stock worth $470, Idylwild Aircraft
stock worth $1620, and Burley Industries stock worth $2250. What
percent of the total value of your portfolio does each stock represent?

Keystrokes Display

5. How many days are there between November 13, 1981 and April 7, 1983?

Keystrokes Display

6. A 90-day option was purchased on October 9, 1981. What is the

expiration date?

Keystrokes Display

2-31
Answers to Review Test for Chapter 2

1. Keystrokes Display Reference

120 [ENTER] 120.00 (Page 2-19, step 3)

6.5 [%] 7.80

2. Keystrokes Display Reference

344 [ENTER] 344,00 (Page 2-19, step 4)

3 [%] 10.32

[+] 354.32

3. Keystrokes Display Reference

280 [ENTER] 280.00 (Page 2-20, step 8)

325 [a%] 16.07

4, Keystrokes Display Reference

470 [ENTER] 470.00 (Page 2-21, step 11)

1620 [+] 2090.00

2250 [+] 4,340.00

470 [%T] 10.83 % Coakley Laboratories

[CLx] 0.00

1620 [%T] 37.33 % Idylwild Aircraft

[CLx] 0.00

2250 [%T] 51.84 % Burley Industries

2-32
Keystrokes Display Reference

11.131981 [ENTER] 11.13 (Page 2-26, step 25)

4.071983 [gll a DYS] 510.00

Keystrokes Display Reference

10.091981 [ENTER] 10.09 (Page 2-27, step 28)

90 [gl[DATE] 1,07,1982 4 The expiration date is

January 7, 1982, a Thursday.

2-33
 Chapter 3

The Time Value of Money

Preview

In Chapter 3 you will:

* Do simple interest calculations.

# Learn about the cash flow diagram and the cash flow sign convention.

Calculate the number of payment periods ([nl).

%

Calculate the periodic interest rate ([il).

*#e

Calculate the present value ([PV]).

*

Calculate the periodic payment amount ([PMT]).

*

Calculate the future value ([FV]).

*

() 1. Many financial problems are based on the concept of charging a

fee (interest charge) for the use of someone else's money for a
fixed period of time. Interest may be handled in one of two ways:

1. Simple interest

or

2. Compound interest

Simple Interest

() 2. Example: If you borrow $500 for two years at fifteen percent annual
simple interest, how much interest would you pay?

The amount of interest can be found by multiplying the principal

(500) times the interest rate (.15) times the time (2).

Keystrokes Display

500 [ENTERI] 500.00 The principal is keyed in

and separated from the next
number.

.15 [x] 75.00 The amount of interest for

one year is calculated.

3-34
 2 [x] 150.00 The total amount of interest
is calculated.

() 3. If you borrow the money for only 4 months, how much interest would
you pay?

Since the time (4 months) is less than 1 year, only a portion of the
yearly interest would be due. The amount of interest would be:

Keystrokes Display

500 [ENTER] .15 [x] 75.00 The yearly interest is

calculated.

12 /] 6.25 The monthly interest is

calculated.

4 [x] 25.00 The total interest due is

calculated.

() 4. With simple interest, only the principal (the original amount of

money) earns interest for the entire life of the transaction. The
interest earned, plus the principal, is repaid in one lump sum.

Compound Interest

() 5. When the simple interest is added to the principal at stated

intervals, and thereafter also earns interest, the interest is said
to be compounded. This method of re-investing earned interest is
very common in business transactions and is called compound interest.

() 6. There are five quantities or variables which have become standards for
describing most compound interest problems.

[n] number of payment periods

[i] interest rate each period (periodic interest rate)

[PV] present value

[PMT] payment amount each period (periodic payment amount)

[FV] future value

3-35
 H 25.00 J (@]
AMORT INT NP\/ RND IR

t£} 12 F DA
E )l BEG END) MEM

FRA IN
G ADS DMY) M
V

flw@mm e
P/R ZPRGM FIN REG
PREFIX

PSE BST GTO ER3 x=0 X ) nl ) B

mooEE FEET
HEWLETT-PACKARD
T B R | )

Location of Financial Keys

Figure 7

0O 7. These five variables have special storage registers in the HP-12C

Just for them - the financial registers. These financial registers
may be cleared at any time by pressing [f] CLEAR [FIN].

() 8. Press [f], release, then press [x<{>y] to clear the financial registers.
This does not clear the display, so you should still see the result
from the previous example:

25.00

The five financial variables can best be explained by referring to

a pictorial representation called the cash flow diagram.

The diagram begins with a horizontal line called the time line.
It represents the term of a financial problem and is divided into a
number (n) of compounding periods of equal length.

1 2 n-1 n

Figure 8

3-36
()10. A financial problem that covers a 6 month period would be diagrammed
as follows:

Figure 9

()11. The exchange of money is represented with vertical arrows. Money

received is represented by an arrow pointing up (positive) from the
point on the time line where the transaction occurred; money paid out
is represented by an arrow pointing down (negative).

T
Money received Money paid out
Figure 10

()12. A single cash flow at the start of the time line is called the
present value (PV). A similar single cash flow at the end of the
time line is called the future value (FV).
Fv

| | | ] I

Figure 11

()13. Payment (PMT) represents a series of cash exchanges of the same sign
(direction) and amount. In the standard cash flow diagram, there is
one payment per compounding period. The number of payments is the
same as the number of compounding periods. The payments can occur
either at the beginning of the period (BEG) or at the end of the
period (END).
BEGin Payment END Payment

PMT PMT PMT PMT PMT PMT PMT PMT

Figure 12

()14. When working compound interest problems involving payments (PMT), it

3-37
 is always necessary to specify whether the payment is at the BEGinning
of the period or at the END of the period. This will be noted in the
examples as (BEG) or (END).

A INT N

I [ Co
DEPRECIAT\ON
DATE T 2=
OED.
PRICE

I
P/R
LN)
'— f——————————
PRGM FIN REG_
II . I
FRAC

PREFIX
INTG ADYS D.MY WARD i~

PSE)BST)GTO 4 :(Sy ) E=d

) fe
on [NIER R 31 RCL
3 a
HEWLETT-PACKARD

Location of [g][BEG] and [g][END]

Figure 13

(015. The HP-12C can be set to solve either kind of compound interest
problem. The keys used for this are shown in Figure 13.

(16. Set the HP-12C in the BEGin mode by pressing [g][BEG]. BEGIN will
then appear in the bottom of the display:

25.00
BEGIN

0O17. Now set the HP-12C in the END mode by pressing [g][END]. BEGIN will
disappear from the display. Notice that END does not appear. If you
see BEGIN in the display, the HP-12C is in the BEGin mode. If you do
not see BEGIN in the display, the HP-12C is in the END mode.

()18. The fifth variable (i) is the compound interest rate per period. In
the HP-12C, this interest rate is always entered and displayed as a
percent.

0O19. The following examples demonstrate the five variables n, i, PV,

PMT, and FV and how to use the cash flow diagram to represent
compound interest problems.

()20. Example: A payment amount of $584.53 is necessary to fully amortize

(pay-off) a mortgage (loan) of $50,000 over 30 years. Payments are
made monthly; interest is compounded monthly at 1.15% (13.80% annually)

3-38
 and the first payment is made 1 month after the exchange of the
initial loan amount (payments occur at the END of each period). Draw
the cash flow diagram to depict the transaction from the viewpoint of
the borrower.

PV=$50, 000 i=13.8/12=1.15%

1 2 3 358 359 360

PMT=$-584 .53 n=30 x 12

Figure 14

NOTE: PV is positive (arrow pointing up) because it represents cash

received. PMT is negative (arrow pointing down) because it
represents cash paid out. The use of positive and negative
signs to represent the direction in which cash is exchanged
is called the CASH FLOW SIGN CONVENTION.

From the lender's point of view of the above problem, the cash flow
diagram would look like this:

i=13.8/12=1.15%

PMT=$584.53

1 2
1]
358 359 360

PV=%$-50, 000 n=30 x 12

Figure 15

()21. Example: Draw a cash flow diagram to represent the following

transaction.

What will be the balance in a savings account (FV) at the end of

4 years if an initial deposit of $1,000 is made followed by 4
annual deposits of $300 (made at the END of each period)? Interest
is compounded yearly at 5%.

3-39
 FV="? (FV=%$2, 508.54)

PMT=$-300 n=4
PV=$-1000

Figure 16

0O2z2. When using the cash flow diagram and the cash flow sign convention
to format compound interest problems, the following rules always
apply:

* n and i must correspond to the same period of time.

* Both n and i must be present in a problem. Either both values

are known, or one is known and the other is to be computed.

* A valid financial transaction must always include at least one

positive cash flow (cash received) and one negative cash flow
(cash paid out).

()23. The cash flow diagram can be used to describe many variations of
compound interest problems. Although the terminology used to
describe a particular cash transaction may vary from industry to
industry, the cash flow diagram is the same. In providing a
means of describing financial problems without using terminology
specific to a particular industry, the cash flow diagram becomes,
in a sense, a universal language.

()au. Six variations of the basic diagram are presented on the next page.
Under each diagram is listed a number of the more common terms used
to describe the represented cash exchange. Note that diagrams
involving payments may be represented with payments at the BEGinning
of the period or at the END of the period. And, the diagrams can
represent either the lender's or the borrower's point of view.

3-40
 BEGin
Saver's Viewpoint Saver's Viewpoint

Compound Growth
T T ]
Pension Fund
Savings Account
Appreciation Annuity Due

END
T Borrower's Viewpoint END
Lender's
Viewpoint

L
Mortgage Mortgage w/Balloon
Direct Reduction Loan Amortization
Amortization Ordinary Annuity
Ordinary Annuity

BEGin

| L]
Borrower's Viewpoint BEGin
Lender's
Viewpoint

Lo |
Lease Lease w/Buyback (Residual)
Amortization Amortization
Annuity Due Annuity Due

Six Variations of the Cash Flow Diagram

Figure 17

3-41
()25. Solving a financial problem on the HP-12C is basically a matter of
keying in the quantities identified in the cash flow diagram using
the corresponding keys, and then calculating the unknown quantity by
pressing the corresponding key. Several examples which demonstrate
this technique follow. Remember from step 6 the definitions of the
five financial variables:

[n] number of payment periods

[i] interest rate each period (periodic interest rate)

[PV] present value

[PMT] payment amount each period (periodic payment amount)

[FV] future value

()26. Example: What monthly payment amount is necessary to repay a 30
year, $60,000 mortgage with an annual interest rate of 15%?

The cash flow diagram looks like this:

$60, 000

T i=15/12%

11 21 al laselssglssol

PMT="? n=30 x 12
Figure 18

The keystroke solution is:

Keystrokes Display

[f] CLEAR [FIN] 25.00 The financial registers are

cleared. The display remains
unchanged.

[g] [END] 25.00 The payment mode is set to

END. ("BEGIN" does not appear
in the display, so you know
that you're in END mode.)

30 [ENTER] 12 [x] 360.00 The total number of payments

is calculated.

3-42
 [n] 360.00 The total number of payments
is stored.

15 [ENTER] 12 [/] 1.25 The monthly interest rate is

calculated.

(i) 1.25 The monthly interest rate is

stored.

60000 [PV] 60,000.00 The mortgage amount is stored.

[PMT] -758.67 The monthly payment is cal-

culated.* The value is
negative because this amount
is paid out each month.

()27. Example: In the previous example, if the borrower could only afford
to pay $740 each month, how much could he borrow?

i=15/12%

R PMT=$-740.00
358 l 358 l 360

n=30
l

x 12

Figure 19

Keystrokes Display

740 [CHS] [PMT] -740.00 The new monthly payment is

stored. The other values do
not need to be re-entered.

[PV] 58,523.75 The maximum loan amount is

calculated.

¥ When the payment (or any other financial variable) is calculated, it

is also stored in the corresponding financial register.

3-43
()28. A house purchased 3 years ago for $48,000 is sold for $65,500.
What yearly compounded appreciation rate does this represent?

$65, 500

=2 T
|
| |
1 2 3
n=3
PMT=0
$-48, 000

Figure 20

Keystrokes Display

[f] CLEAR [FIN] 58,523.75 Clears the financial registers

(but not the display).

Since there is no periodic

payment amount, it is not
necessary to specify BEGin or
END mode.

3 [n] 3.00 The total number of periods

is stored.

48000 [CHS] [PV] -48,000.00 The present value is stored.

65500 [FV] 65,500.00 The future value is stored.

[i] 10.92 The percentage of yearly

appreciation is calculated.

3-44
()29. If the house in the previous example were to appreciate 12% each year,
how much would it be worth today?

$-48, 000

Figure 21

Keystrokes Display

12 [i] 12.00 The yearly appreciation rate

is stored.

[FV] 67,436.54 The current value is

calculated assuming 12%
annual appreciation.

()30. A development company wishes to purchase a group of condominiums which

return an annual cash flow of $21,400. The expected holding period is
5 years, and the estimated net return from the sale is $620,000.
Calculate the maximum amount the company can pay for the condominiums
in order to realize at least a 16% yield.

Fv=$620, 000
i=16%

PMT=$21, 400

[ T 1]

Figure 22

3-45
 Keystrokes Display

[f] CLEAR [FIN] 67,436.54 The financial registers are

cleared.

[g] [END] 67,436.54 The payment mode is set to

END. ¥

5 [n] 5.00 The holding period is stored.

16 [i] 16.00 The desired yield is stored.

21400 [PMT] 21,400.00 The annual cash flow is

stored.

620000 [FV] 620,000.00 The estimated selling price is

stored.

[PV] -365,259.95 The maximum purchase price to

yield 16% is calculated.

()31, If the condominiums are purchased for $355,000, what is the annual
yield?
=7 FV=$620, 000

PMT=%$21, 400

PV=$-355, 000
Figure 23

* Since the display does not show "BEGIN", it is not necessary to press
[g][END]. However, to help you develop the habit of thinking about
the payment mode each time you solve a financial problem, the payment
mode keystroke will always be shown even though it may not be needed.
One of the most common errors that people make when attempting to
solve financial problems is using the wrong payment mode.

3-46
 Keystrokes Display

355000 [PV] 355,000.00 The purchase price is stored.

[il Error 5 What happened?

Looking back at these Kkeystrokes, you will discover that the purchase
price (money paid out) was not entered as a negative number. This is a
very common error which everyone discovers at some time, and it can
easily be corrected.* First you should clear the error message from
the display, and then re-enter the correct purchase price.

Keystrokes Display

[CLx] 355,000.00 The error is cleared and the

calculator is restored to its
condition before the improper
operation was attempted.

[CHS] [PV] -355,000.00 The purchase price is

corrected and stored.

[i] 16.73 The percent annual yield is

calculated.

Cash flows must be entered using the cash flow sign convention ---
money received is positive and money paid out is negative.

()32. Assuming a $355,000 purchase price, what sales price is necessary to

achieve a 17.25% annual yield?

¥ For a complete list of error messages, refer to Appendix C of the

HP-12C Owner's Handbook and Problem-Solving Guide.

3-47
 1=17.25% Fv="?

PMT=%$21, 400

1
LT 1] 2 3 4 5
n=5

$-355, 000

Figure 24

Keystrokes Display

17.25 [i] 17.25 The desired yield is stored.

[FV] 635,819.03 The sales price is calculated

()33. If interest is compounded monthly, you can use a shortcut provided

on the calculator to calculate and store n and i:

1. To calculate and store the number of months (n), key the number of
years into the display and press [g] [12x].
2. To calculate and store the monthly interest (i), key the annual
interest rate into the display and press [g] [12/].

6358 i3.03

AMORT INT NPV RN

X
1 \2— CFO PM
CF FV
- .
DATE l BEG .
END .
sy .
DEPRECIAT!ON
PRICE YTM

. EpEEEREE
seindjjeasse
- ) FRAC INTG ADYS D.MY M.DY )] LR
[—CLEAR%
P/R PRGM FIN REG PREFIX

S TS T N B Sa @IS G

o zzlosas
) |
HEWLETT-PACKARD
] - - ) TE3 @ - == - p

Location of [g][12x] and [gl[12/]

Figure 25

3-48
 These keys not only multiply or divide the displayed number by 12,
but they also automatically store the result in the corresponding
register.

()34, Example: Calculate the monthly payment amount needed to repay a

$51,000, 29 year mortgage with an annual interest rate of 14.25%.

PV=$51, 000 i=14.25/12%

1 2 347 348

PMT="? n=28x12

Figure 26

Keystrokes Display

[f] CLEAR [FIN] 635,819.03 The financial registers are

cleared.

[g] [END] 635,819.03 The payment mode is set to

END.

29 [g] [12x] 348.00 The total number of monthly

payments is calculated and
stored.

14.25 [g] [12/] 1.19 The monthly interest rate is

calculated and stored.

51000 [PV] 51,000.00 The mortgage amount is stored.

[PMT] -615.75 The monthly payment (to be
paid) is calculated.

()35. Suppose that the annual interest rate is increased to 14.6%. What is
the new payment amount?

3-49
 PV=$51, 000 i=14.6/12%

1 2 ' 347 348 l

PMT="? n=348
Figure 27

Keystrokes Display

14.6 [g] [12/1] 1.22 The new monthly interest rate

is calculated and stored.

[PMT] -629.87 The new monthly payment is

calculated.

()36. What is the balance on the previous mortgage at the end of 5 years?
(What is the amount to be paid, IN ADDITION TO THE MONTHLY PAYMENT, to
pay off the mortgage at the end of year 57?)

PV=$51, 000 i=14.6/12%

1 2 | 58 60

n=5x12
PMT $-629.87

Fv="?
Figure 28

Keystrokes Display

5 [g] [12x] 60.00 The period where the balance

occurs is calculated and
stored.

[FV] -50,179.44 The balance is calculated.

()37. How much money must you set aside in a savings account each quarter in
order to accumulate $4000 in five years? The account compounds
quarterly with an annual interest rate of 6% and deposits "BEGin"
immediately.

3-50
 Fv=%$4, 000

i=6/4%

l 1 l 2 l l 19 l 20

PMT="?

Figure 29

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared.

[g] [BEG] The payment mode is set to

BEGin. (See BEGIN in the
display.)
5 [ENTER] 4 [x] [n] 20.00 The total number of quarters
is stored.

6 [ENTER] 4 [/] [i] 1.50 The quarterly interest rate is

stored.

4000 [FV] 4,000.00 The total to be accumulated is

stored.

[PMT] -170.43 The amount to deposit each

quarter is determined.

()38. In the previous example, what interest rate did the bank pay if the
actual amount at the end of the five years was $4,025.50?

FV=%$4, 025.50

T PMT=$-170.43

Figure 30

3-51
 Keystrokes Display

4025.50 [FV] 4,025.50 The total accumulation is

stored.

(i] 1.56 The quarterly interest rate is

calculated.

4 [x] 6.23 The annual interest rate is

calculated.

()39. If you increase the deposits to $200 each quarter, how long will it
take to accumulate $4200? To do this example as shown, steps 37 and 38
must be calculated immediately preceding step 39.

FV=$4200

i=6.23/4%

e PMT=$-200

Figure 31

Keystrokes Display

200 [CHS] [PMT] -200.00 The new payment amount is

stored.

4200 [FV] 4,200.00 The new total accumulation

is stored.

[n] 19.00 The number of quarters is

calculated. The HP-12C has
rounded the answer to the
next higher integer.

Simple Interest

()40. The financial keys ([n], [i], [PV], [PMT], [FV]) are also used for
entering information in a simple interest problem. The HP-12C simulta-
neously calculates simple interest on both a 360-day basis and a
365-day basis with the [f][INT] key.

3-52
 AMORT INT N RND

I
Iir2. 8 [ria CFU) CFZReEa
DEPRECIAT\ON——|
DATE EED END ] S

LN IaEEa
FRAC AN ADVS D.MY )l M DY )

@i
—
P/R PRGM FIN REG PREFIX

1) BST GTO XSy ) x=0 - - B

Booms
HEWLETT:-PACKARD
dLSTx) xP s ) B
F§+J )

Location of [f][INT], [R¥ ], and [x<Oy]

Figure 32

O41. Example: Your friend needs a loan and has requested that you lend
him $650 for 60 days. If you lend him the money at 14% simple
interest, to be calculated on a 360-day basis, how much will he owe
you?

Keystrokes Display

[f] CLEAR [FIN] 19.00 The financial registers are

cleared.

60 [n] 60.00 The number of days is stored.

14 [i] 14.00 The annual interest is stored.

650 [CHS] [PV] -650.00 The principal is stored.

[(f] [INT] 15.17 The interest on a 360-day

basis is calculated.

[+] 665.17 The total amount owed is

calculated.

0Ou2. The following keystrokes can be used to find the amount of simple
interest. In this case, it makes no difference whether the HP-12C
is in BEGin or END mode.

3-53
 1. Press [f] CLEAR [FIN].

2. Key in, or calculate, the number of days and press [n].

3 . Key in the annual interest rate (as a percent) and press [i].

4. Key in the principal amount and press [CHS] [PV].

5 . Press [f] [INT] to calculate and display the amount of interest on

a 360-day basis.

(Optional: To display the interest on a 365-day basis, press

[R¥ 1[x<Oyl.

6. Press [+] to add the interest in the display to the principal.

()u3. Example: How much interest is due on a 90-day note for $850 at 15%
simple interest, figured on a 365-day basis? What is the total
amount owed?

Keystrokes Display

[(f] CLEAR [FIN] 665.17 The financial registers are

cleared.

90 [n] 90.00 The number of days is stored.

15 [i] 15.00 The annual interest is stored.

850 [CHS] [PV] -850.00 The principal is stored.

[£ILINTIR ¢ 1[x<Dy] 31.44 The interest on a 365-day

basis is calculated.

[+] 881.u44 The total amount owed is

calculated.

3-54
Chapter 3 Summary
* [n] is the total number of payment periods. Reference: Page 3-35,
step 6.

[i] is the interest rate each period. Reference: Page 3-35, step 6.

[PV] is the present value. Reference: Page 3-35, step 6.

[PMT] is the periodic payment amount. Reference: Page 3-35, step 6.

[FV] is the future value. Reference: Page 3-35, step 6.

[f] CLEAR [FIN] clears the financial registers. Reference: Page 3-36,
step 7.

The cash flow diagram is the pictorial representation of a financial

problem. Reference: Pages 3-36 - 3-37, steps 9-13.

[g] [END] means that payments are made at the end of the payment
period. Reference: Page 3-37, step 13.

[g] [BEG] means that payments are made at the beginning of the payment
period. Reference: Page 3-37, step 13.

[n] and [i] must correspond to the same period of time.

Reference: Page 3-40, step 22.

Both [n] and [i] must be present in a problem.

Reference: Page 3-U40, step 22.

A valid financial transaction must have at least one positive cash

flow and one negative cash flow. Reference: Page 3-40, step 22.

[g] [12x] multiplies the number in the display by 12 and stores the
result in [n]. Reference: Page 3-48, step 33.

[g] [12/] divides the number in the display by 12 and stores the result
in [i]. Reference: Page 3-48, step 33.
[f] [INT] calculates the amount of simple interest.
Reference: Pages 3-52 - 3-54, steps 40-43.

3-55
Review Test for Chapter 3

The answers are on Page 3-58, immediately following this review test.

What monthly payment amount is necessary to amortize a 30-year, $50,000

mortgage with an annual interest rate of 13.5%?

Keystrokes Display

What would be the monthly payment in question #1 if the interest rate

is increased to 14%?

Keystrokes Display

What is the remaining balance on the mortgage in question #2 at the

end of year 57

Keystrokes Display

If you deposit $100 in a 6% savings account, how long will it take

you to double your funds? Assume that interest is paid quarterly.

Keystrokes Display

3-56
5. What quarterly interest rate is necessary for you to double your funds
in 8 years?

Keystrokes Display

6. If you deposit $100 at the beginning of each month into an account

which pays 6 1/2% annual interest compounded monthly, how much will
you have in the account in 1 year?

Keystrokes Display

7. How much simple interest will you receive on a 90-day, $10,000 note at
11%? Assume a 360-day year.

Keystrokes Display

3-57
Answers to Review Test for Chapter 3

1. Keystrokes Display Reference

[f] CLEAR [FIN] (Page 3-49, step 34)

[g] [END]
30 [g] [12x] 360.00
13.5 [g] [12/] 1.13

50000 [PV] 50,000.00

[PMT] -572.71

Keystrokes Display Reference

14 [g] [12/] 1.17 (Page 3-U49, step 35)

[PMT] -592.44

Keystrokes Display Reference

5 [g] [12x] 60.00 (Page 3-50, step 36)

[FV] -49,215.41

Keystrokes Display Reference

[f] CLEAR [FIN] (Pages 3-50 - 3-52, steps

37-39)
6 [ENTER] 4 [/] [i] 1.50

100 [CHS] [PV] -100.00

200 [FV] 200.00

[n] 47.00 Number of quarters.

3-58
Keystrokes Display Reference

8 [ENTER] 4 [x] [n] 32.00 (Page 3-44, step 28)

[i] 2.19 Quarterly interest rate.

Keystrokes Display Reference

[f] CLEAR [FIN] (Pages 3-50 - 3-52, steps

37-39)

(g] [BEG]
1 [g] [12x] 12.00
6.5 [g] [12/] 0.54
100 [CHS] [PMT] -100.00
[FV] 1,243.10

Keystrokes Display Reference

[f] CLEAR [FIN] (Page 3-53, step 42)

90 [n] 90.00
11 [i] 11.00
10000 [CHS] [PV] -10,000.00
[f] [INT] 275.00

3-59
 Chapter 4

Additional Financial Functions

Preview

In Chapter 4 you will:

* Do an amortization schedule.

* Learn about discounted cash flow analysis: IRR and NPV.

Amortization Schedules

0 1. Most mortgages and installment loans are in a class commonly called

"direct reduction" loans. In a "direct reduction" loan the debt
is paid by equal periodic payments although varying portions of each
payment are applied toward principal and interest.

The interest is paid first, and then the remainder of the payment
is used to reduce the debt. As the debt (or remaining balance) is
reduced with each payment, so is the amount of interest to be paid.
With a smaller portion of each payment being deducted for interest,
the amount remaining to pay off the balance increases.

The breakdown of each payment into the interest portion and the
principal reduction portion is called an amortization schedule. The
word amortization comes from the French "a mort" meaning "at the
point of death." Likewise, you are "killing" a loan by paying it
off.

The amortization of a mortgage can be represented by the following

figure:

4-60
Payment
Amount
Principal Portion
of Payment

Interest Portion
of Payment

1 2 3 N

Periodic Payment Number

Mortgage Amortization Diagram

Figure 33

As you reduce the size of the loan, the amount of interest

decreases ... and a gradually larger portion of each payment
goes toward the reduction of the debt itself (the outstanding
principal). By the time you reach your last payment, very little is
deducted for interest.

() 5. The HP-12C enables you to calculate the amounts applied to the reduc-
tion of principal and to the interest, as well as the remaining balance
on the loan after the payment has been made, using the [f][AMORT]
function.

3
(12C])

EREEENESS
AMORT INT NPV RND IRR

b AT CF, ) DATE 1) END ) MEM

EEEpEEERE
DEPRECIAUON
PRICE

YTl LI
LN L INTG ADYS D.MY M.DY X wW )

PRGM FIN REG

PREFIX

U PsE I BST GT0 x<y )l x=0 I G @ B

B reelcome
HEWLETT-PACKARD
) ) b 4 R ) @ @&TN

Location of [f] [AMORT]

Figure 34

() 6. Example: For a house you are about to buy, you can obtain a 29-year

4-61
 mortgage for $61,000 at 14.5% annual interest. The monthly payment
is made at the end of the month. Find the amounts that would be
applied to interest and to principal for each of the first two payments.

Keystrokes Display

[(f] CLEAR [FIN] The financial registers are

cleared.

[g] [END] END mode is set.

29 [g] [12x] 348.00 The total number of payments

is calculated and stored.

4.5 [g] [12/] 1.21 The monthly interest rate is

calculated and stored.

61000 [PV] 61,000.00 The loan amount is stored.

[PMT] ~748.54 The monthly payment is

calculated.

0 [n] 0.00 The n-register is cleared.

1 1. The number of months to be

amortized is keyed in.

[f] [AMORT] -737.08 The amount of interest on

the first payment is
calculated.

[x<>y] -11.46 The amount of principal

reduction from the first
payment is displayed.

1 [f] [AMORT] -736.94 The amount of interest on

the second payment is
calculated.

[x<Oy] -11.60 The amount of principal

reduction from the second
payment is displayed.

() 7. What is the remaining balance on the loan after the first two payments?

Keystrokes Display

(RCL] [PV] 60,976.94 The remaining balance is

displayed.

() 8. To display the total number of payments amortized so far, press:

4-62
 Keystrokes Display

[RCL] [n] 2.00 The number of months

amortized is displayed.

Notice that you can recall the numbers stored in the financial
registers using [RCL] just as you can recall numbers stored in any
other register. Remember, when you recall a number stored in a
register, the number in the register is unchanged. [RCL] simply copies
the number from the register into the display.

()10. In summary, to obtain an amortization schedule:

1. Press [f] CLEAR [FIN] to clear the financial registers.

2. Set the payment mode ([g] [END] or [g] [BEG]).

3. Store the total number of periods using [n] or [g] [12x].

4, Store the periodic interest rate using [i] or [g] [12/].

5 . Store the amount of the loan (the principal) using [PV].

6 . Press [PMT] to calculate the periodic payment amount.

7. Press 0 [n].
8. Key in the number of payments to be amortized.

9 . Press [f] [AMORT] to calculate and display the amount applied to

interest from those payments.

10. Press [x<>y] to display the amount applied to principal from those
payments.

11. To display the remaining balance on the loan, press [RCL] [PV].

12. To display the total number of payments amortized, press [RCL] [n].

O11. For tax purposes, you would like to know how much interest you will
pay during your first year (12 payments) of home ownership. You have
a 29 year, $56,300 mortgage at 14.2%.

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared.

29 [g] [12x] 348.00 The total number of payments

is calculated and stored.

4-63
 14.2 [g] [12/] 1.18 The monthly interest rate
is calculated and stored.

56300 [PV] 56,300.00 The mortgage amount is stored.

[PMT] -677.51 The payment amount is

calculated.

0 [n] 0.00 The n-register is cleared.

12 [f] [AMORT] -7,985.43 The amount of interest paid

over the first 12 months is
calculated.

0O12. In the previous example, how much principal is paid?

Keystrokes Display

[x<>y] -144.69 The amount of principal

paid over the first 12
months is calculated.

()13. How much interest would be paid during the second year (the next 12
months)?

Keystrokes Display

12 [f] [AMORT] -7,963.48 The interest paid during

year 2 (the second 12 months)
is calculated.

Discounted Cash Flow Analysis

()14, Discounted cash flow analysis is a way of evaluating investment

alternatives on the same basis -- their present value. The
HP-12C provides functions for the two most widely-used methods of
discounted cash flow analysis: the net present value (NPV) approach
and the internal rate of return (IRR) approach. Here is where these
keys are located on the keyboard, including the necessary keys for
storing information.

4-64
 H -196 348 i D)

Bm ==
AMORT _INT NPV RND IRR

Aree e DATE BEG END) MEM /

nnnmmwm B8 FRAC INTG ADYS D.MY M DY

EEEES
P/R PRGMFIN REG PREFIX

=PSE

Es EEED
BST

- espat--T-]
GTO & <v E2 o

X 5 - D
HEWLETT-PACKARD

Locations of [f][NPV], [fI[IRR], [gl(CFol, [gl[CFjl, and [glINj]

Figure 35

015. To this point you have been working problems involving only even cash
flow series (except for the initial cash flow (PV) and the final cash
flow (FV), each payment amount is the same). NPV and IRR enable you to
analyze financial problems involving UNEVEN cash flows occurring at
REGULAR intervals. Problems involving even or uneven cash flows
occurring at irregular intervals are not covered in this guide. As in
compound interest calculations, the interval between cash flows can be
any time period.

(16. Assuming a minimum desired yield (financial objective), the net present
value method finds the present value of the future cash flows
and adds this value to the initial investment (the cash flow sign
convention is used).

0O17. If this net present value is greater than zero, the transaction meets
your financial objectives. If the net present value is less than zero,
the investment is not attractive.

()18. A comparison of the NPV's of alternative investment possibilities

indicates which of them is most desirable: the greater the NPV, the
more attractive the investment.

0O19. Example: You have an opportunity to invest in a rental unit which

requires a $70,000 down payment. If the annual cash flows are projected
as follows, and you desire a 17% annual yield, should you invest in the
property?

4-65
 Year Cash Flow

0 -70,000

2 8,100
3 16,600

y 107,500 (income + gain from sale of

property)

The cash flow diagram looks like this:

107, 500

16, 600

Figure 36

4-66
 Keystrokes Display

[f] CLEAR [REG] 0.00 The storage registers are

cleared, including the
financial registers.

70000 [CHS]
[g] [CFol -70,000.00 The initial investment is
stored.

3500 [CHS]
[g] [CFj] -3,500.00

8100 [g] [CFjl 8,100.00 The cash flows are stored.

16600 [g] [CFj] 16,600.00

107500 [g] [CFjl 107,500.00

17 [i] 17.00 The desired yield is stored.

[(f] [NPV] 657 .64 The net present value is

calculated.

Since the NPV is positive, the investment exceeds the objective of

a 17% return.

()20. The j in [CFj] means any cash flow except the initial investment. The
initial investment (cash flow zero) is stored by pressing [g] [CFol.
When you store the first cash flow, you can think of j taking the value
1. When you store the second cash flow, j takes the value 2, and so on.
It turns out that these numbers, 0, 1, 2 and so on, have a very
straight-forward meaning. They simply refer to the storage registers
into which the dollar amounts are automatically stored by the HP-12C.
Perform the following keystrokes to confirm this.

0Oa21. Keystrokes Display

[RCL] O -70,000.00 The initial investment.

[RCL] 1 -3,500.00 The first cash flow.

[RCL] 2 8,100.00 The second cash flow.

[RCL] 3 16,600.00 The third cash flow.

[RCL] 4 107,500.00 The fourth cash flow.

4-67
0O22. Knowing where your cash flows are stored makes it easy to check the
accuracy of your entries and to correct any that are wrong. For
instance, in the example above, if 7100 had been entered incorrectly
as the second cash flow, the keystrokes 8100 [STO] 2 would correct
your mistake.

023. A maximum of 21 cash flow amounts (including the initial investmert

CFo) can be stored in the HP-12C.* The first 20 cash flows are stored
in the 20 general purpose storage registers, and if there is a 21st
cash flow, it is stored in the FV financial register. Problems
involving more than 21 cash flows can be handled if, among the cash
flows, there are consecutive cash flows of the same amount (that is,
a group of equal cash flows). Each group can contain a maximum of
99 equal cash flows.

()au, Example: An investor has an opportunity to purchase a piece of

property for $70,000 down. If the after-tax monthly cash flows are as
follows, should the investor purchase the property if he desires a
15% rate of return?

Group (j) Cash Flow (CFj) Number of Months (Nj)

0 ~70,000 1
1 -1,000 2
2 800 56

3 87,500 1 (income + gain from

sale of property)

()25. The number of consecutive times each cash flow occurs is designated
Nj, corresponding to cash flow amount CFj, and is entered using the
[g]INj] key. Here is how the previous problem is solved:
Keystrokes Display

[f] CLEAR [REG] 0.00 The storage registers are

cleared, including the
financial registers.

70000 [CHS]
[g] [CFo] -70,000.00 The initial investment is
stored.

This assumes that there are a maximum of 8 instructions in program

memory.

4-68
 1000 [CHS]
(gl [CFj] -1,000.00 The first cash flow is stored.

2 [g] [Nj] 2.00 The number of cash flows in

the first group is stored.

800 [g] [CFjl 800.00 The second cash flow is

stored.

56 [gl [Nj] 56.00 The number of cash flows in

the second group is stored.

87500 [g] [CFjl 87,500.00 The final cash flow is stored.

15 [g] [12/1] 1.25 The monthly desired yield is

stored.

[f] [NPV] 1,373.74 The NPV is calculated.

Since the final NPV is positive, the investment meets the 15%
objective.

()26. In summary, to enter the amounts of the cash flows and the number
of times they occur:

1. Press [f] CLEAR [REG] to clear all of the storage registers,

including the financial registers.

Key in the amount of the initial investment (press [CHS] if the

cash flow is negative) and press [g] [CFol.

If the initial investment consists of more than one cash flow of

the amount entered in step 2, key in the number of those cash
flows and press [g] [Nj]. The calculator assumes that No is 1
if [g] [Nj] is not pressed.
. Key in the amount of the next cash flow (press [CHS] if the cash
flow is negative) and press [g] [CFjl.

If the amount entered in step 4 occurs more than once, key in the
number of those cash flows and press [g] [Njl. If [g] [Nj] is
not pressed, the calculator assumes that Nj is 1 for the CFj just
entered.

6. Repeat steps 4 and 5 until all cash flows have been entered.

0er. With the amounts of the cash flows stored in the calculator, you
can calculate NPV as follows:

4-69
 1. Enter the periodic interest rate using [i] or [g] [12/].

2. Press [f] [NPV].

()28. Example: An investor has an opportunity to purchase a piece of property

for $87,000 down and he would like a 17% return. If the quarterly cash
flows are as follows, should the investor purchase the property?

Group (J) Cash Flow (CFj) Number of Quarters (Nj)

0 -87,000 1

3,500 8

3,000 12
N

2,500 y
w

110,000 1 (income + gain

=

from sale of
property)

Keystrokes Display

[f] CLEAR [REG] 0.00 The storage registers are

cleared.

87000 [CHS]

(gl [CFo] -87,000.00 The investment is stored.

3500 [g] [CFjl 3,500.00 The second cash flow is

stored.

8 [g] [Nj] 8.00 The number of cash flows

in the second group is
stored.

3000 [g] [CFjl 3,000.00 The third cash flow is stored.

12 [g] [Nj] 12.00 The number of times this

cash flow occurs is stored.

2500 [g] [CFj] 2,500.00 The fourth cash flow is

stored.

4 [gl [Nj] 4.00 The number of times this

cash flow occurs is stored.

110000 [g] [CFj] 110,000.00 The final cash flow is stored.

4-70
 17 [ENTER] 4 [/] 4,25
[i] 4,25 The quarterly interest rate is
calculated and stored.

[f]1 [NPV] -1,001.79 The NPV is calculated.

Since the NPV is negative, the investment does not meet the 17%
objective.

()29. The internal rate of return -- the IRR -- is the rate for which the
NPV equals zero. Rather than comparing the NPV's of alternative
investment possibilities, you may want to compare their rates
of return -- that is, their IRR's -- or you may want to determine the
IRR of a single investment plan. (IRR assumes that all cash flows
are re-invested at the internal rate of return.)

()30. To calculate the internal rate of return of the previous example

press:

Keystrokes Display

[(f] [IRR] 4,18 The quarterly IRR is calculated

(in approximately 30 seconds).

4 [x] 16.71 The annual rate of return is

displayed.

()31. The calculator may take several seconds or even minutes to produce
an answer for IRR. This is because the mathematical calculations
for finding IRR are extremely complex, involving a series of
successive calculations.

()32. Calculate the internal rate of return (IRR) as follows:

1. Enter the cash flows using the method described in step 26. The
cash flow sequence must contain at least one sign change. In other
words, if the first several cash flows are negative, and they are
followed by all positive values, that counts as one sign change.
Cash flows with multiple sign changes may have multiple answers.

2. Press [f] [IRR].

4-71
 The calculated answer is the periodic rate of return. If the cash
flow periods are other than annual (for instance monthly or quarterly)
the answer should be multiplied by the number of periods per year to
determine the nominal annual internal rate of return, also called the
annual percentage rate or APR.¥

()33. Example: An investment proposal calls for an increasing outlay of

cash for each of 5 years and then a substantial payoff. If the
annual cash flows are as follows, what is the return on the invest-
ment?

Year (j) Cash Flow (CFj)

0 -2,000

1 -2,500

2 -3,000

4 -4,000

5 25,000

Keystrokes Display

[f] CLEAR [REG] 0.00 The storage registers are

cleared.

2000 [CHS]
(gl [CFo] -2,000.00

2500 [CHS]
(gl [CFj] -2,500.00

3000 [CHS]
(gl [CFjl -3,000.00 The cash flows are stored.

3500 [CHS]
(gl [CFj] -3,500.00

4000 [CHS]
(gl [CFj] -4,000.00

* See "Nominal Rate Converted to Effective Rate" in Section 15 of the

HP-12C Owner's Handbook and Problem-Solving Guide to convert this rate
to the effective annual interest rate.

4-72
25000 [glICFj] 25,000.00 The final cash flow is stored.

[£f] [IRR] 19.71 The rate of return is

calculated.

Since the cash flows occur annually, the result is both the nominal
interest rate (the APR) and the effective interest rate.

4-73
Chapter 4 Summary
* [f] [AMORT] calculates the amount of interest and principal for each
payment. Reference: Pages 4-61 - 4-63, steps 5-10.

[f] [NPV] determines the net present value of a series of uneven

cash flows. Reference: Page 4-65 and 4-68 - 4-69, steps 16-19,
25-27 .

[g] [CFo] is used to enter the initial cash flow.

Reference: Page 4-67, step 20.

[g] [CFj] is used to enter cash flows 1 to j. Reference: Page 4-67,

step 20.

[g] [Nj] is used to enter the number of times each cash flow occurs.
Reference: Page 4-68, step 25.

[f] [IRR] calculates the internal rate of return of a series of uneven

cash flows. Reference: Pages 4-71 - U4-73, steps 29, 32-33.

4-74
Review Test for Chapter 4
The answers are on Page 4-77, immediately following this review test.

Generate an amortization schedule for the first two payments of an

$80,000 loan with monthly payments (at the end of the month) of $916.33
at an annual interest rate of 13.5%. Then find the remaining balance
after the second payment.

Keystrokes Display

Generate a yearly amortization schedule for the first two years of a

$25,000 loan at 10% with monthly payments of $330.38 (END). What is the
remaining balance at the end of the second year?

Keystrokes Display

You have an opportunity to purchase a duplex for $80,000 and would like
at least a 13% return. You expect to keep the duplex for 5 years and
then sell it for $125,000. Assuming the following yearly cash flows,
calculate the NPV to determine whether the investment meets your profit
objective of a 13% return.

4-75
 Year (j) Cash Flow (CFj)

0 -80,000
1 =500

2 4,500
3 5,500

Y 4,500
5 5,000 + 125,000 (property sold)

Keystrokes Display

4. In the previous example, what is the yield?

Keystrokes Display

4-76
Answers to Review Test for Chapter 4

1. Keystrokes Display Reference

[f] CLEAR [FIN] (Page u4-63, step 10)

(gl [END]
80000 [PV] 80,000.00

916.33 [CHS] [PMT] -916.33

13.5 [g] [12/] 1.13

1 [f] [AMORT] -900.00

[x<>y] -16.33
1 [f] [AMORT] -899.82

[xOy] -16.51
[RCL] [PV] 79,967.16

2. Keystrokes Display Reference

[f] CLEAR [FIN] (Pages 4-63 - 4-6M4,

steps 11-13)
25000 [PV] 25,000.00

10 [gl [12/] 0.83

330.38 [CHS] [PMT] -330.38

12 [f] [AMORT] -2,430.97
[x<Oy] -1,533.59

12 [f] [AMORT] -2,270.39

[x<Oy] -1,694.17
[RCL] [PV] 21,772.24

4-77
3. Keystrokes Display Reference

[f] CLEAR [REG] 0.00 (Page 4-69, steps 26-27)

80000 [CHS]
[g] [CFol -80,000.00

500 [CHS] [gl] [CFj] -500.00

4500 [g] [CFj] 4,500.00

5500 [g] [CFjl 5,500.00

4500 [g] [CFj] 4,500.00

125000 [ENTER] 125,000.00

5000 [+] [g] [CFj] 130,000.00

13 [i] 13.00

[f] [NPV] 212.18 Since the NPV is positive,

your profit objective is
realized.

Keystrokes Display Reference

[f] [IRR] 13.06 (Page 4-T2, step 32)

4-78
NOTES

4-79
 Chapter 5

Depreciation Calculations

Preview

In Chapter 5 you will:

¥ Learn about three types of depreciation:

. Straight-line.
. Sum-of-the-years-digits.
. Declining balance.

() 1. Tangible assets such as buildings, machines, tools, trucks, etc.

typically decline in value over time through usage, technological
obsolescence, environmental deterioration or a combination of all
of these.

() 2. Depreciation is a method of periodically accounting for the declining

value of an asset.

() 3. The HP-12C has keys for the three most common arithmetic formula
depreciation methods: straight-line ([SL]), sum-of-the-years-digits
([S0YD]) and declining-balance ([DBJ]).*

MORT INT NP\/

12)(\ /12— Co SoEEDDE DATE) BEG ) END I MEM

)Ira
‘1 /x [
/T FRAC
A/ INTG ADVS
EEX DMV) /MDY
. R -
.

o
R———————————
P/R PRGM FIN REG PREFIX

S TN TS RN EEN

B reslesEs
- _
HEWLETT-PACKARD
4 ) ) 2 G N B | b

Locations of [f][SL], [f]1[SOYD], and [f][DB]

Figure 37

% The depreciation keys do not meet the requirements of the Federal tax
policy in effect in 1982, which dictates that tables published by the
IRS are to be used to determine deductions for tax purposes.

5-80
() 4. Sum-of-the-years-digits and declining-balance are methods of
accelerated depreciation whereby higher annual amounts of depreciation
are charged during the early years of an asset's life than with the
straight-line depreciation method, reflecting the fact that many
assets decline in value most during the early part of their lives.

() 5. When the annual amount of depreciation for each of the three methods
is plotted versus time, the graph looks like this:

SOYD

Annual SL
Depreciation
in $
DB
(200%)

| ] ] | ] ]
T 1 I I T 1

Years

Comparing Depreciation Methods

Figure 38

() 6. Example: The Drifter Apartments have a depreciable value of $126,000.

The owner wishes to use 125% declining-balance depreciation over 20
years. Assuming zero salvage value after 20 years, what is the annual
depreciation allowance and remaining depreciable value in year 17

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared.

126000 [PV] 126,000.00 The depreciable value is

stored.

0 [FV] 0.00 The salvage value is stored.

20 [n] 20.00 The useful life is stored.

125 [1i] 125.00 The declining-balance factor

is stored.

1 [f] [DB] 7,875.00 The amount of depreciation in

the first year is calculated.

5-81
[x<>y] 118,125.00 The remaining depreciable
value after the first year is
displayed.

How does this compare with sum-of-the-years-digits and straight-line

depreciation in year 1?2

Keystrokes Display

1 [f] [S0YD] 12,000.00 The amount of depreciation in

the first year is calculated.

[x<>y] 114,000.00 The remaining depreciable

value after the first year is
displayed.

1 [f] [SL] 6,300.00 The amount of depreciation in

the first year is calculated.

[x<>y] 119,700.00 The remaining depreciable

value after the first year is
displayed.

The HP-12C enables you to calculate the amount of depreciation and the
remaining depreciable value (book value minus salvage value) for three
depreciation methods. Use the following procedures:

1. Press [f] CLEAR [FIN].

2. Key in the original cost of the asset and press [PV]. (The cash
flow sign convention is not observed.)

3. Key in the salvage value of the asset and press [FV]. If the
salvage value is zero, press 0 [FV].

4. Key in the expected useful life of the asset in years and press
[n].

5. If the declining-balance method is used, key in the declining-

balance factor (as a percentage) and press [i]. For example,
1 1/4 times the straight-line rate --- 125 percent declining-balance
--- would be keyed in as 125 [i].

6. Key in the number of the year for which depreciation is to be

calculated.

T. Press:

¥ [f] [SL] for straight-line depreciation.

5-82
 ¥ [f] [SOYD] for sum-of-the-years-digits depreciation.
¥ [f] [DB] for declining-balance depreciation.

The amount of depreciation is in the display. To display the

remaining depreciable value (the book value less the salvage value)
after the depreciation has been calculated, press [x<>y].

0 9. Example: A computer system purchased for $118,000 is depreciated

over 5 years using the SOYD method. The estimated salvage value is
$10,000. Find the depreciation and remaining depreciable value for
each year of the system's useful life.

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared.

118000 [PV] 118,000.00 The original cost is stored.

10000 [FV] 10,000.00 The salvage value is stored.

5 [n] 5.00 The useful life is stored.

1 [£] [S0YD] 36,000.00 The amount of depreciation in
the first year is calculated.

[x<Oy] 72,000.00 The remaining depreciable

value after the first year
is displayed.

2 [f] [S0YD] 28,800.00 The second year's depreciation

is calculated.

[x<Oy] 43,200.00 The remaining depreciable

value after the second year
is displayed.

3 [f] [soyD] 21,600.00 The third year's depreciation

is calculated.

[x<Oy] 21,600.00 The remaining depreciable

value after the third year
is displayed.

4 [f] [soyD] 14,400.00 The fourth year's

depreciation.

5-83
 [x<Oy] 7,200.00 The remaining depreciable
value.

5 [f] [SoYD] 7,200.00 The fifth year's depreciation.

[x<Oy] 0.00 The remaining depreciable

value.

(10. Now calculate a 5-year straight-line depreciation schedule for the same
computer system.

Your HP-12C already contains all of the necessary values, so just

press [f] [SL] to see the alternative depreciation.

Keystrokes Display

1 [f] [SL] 21,600.00 The first year's depreciation

is calculated.

[x<>y] 86,400.00 The remaining depreciable

value after the first year
is displayed.

2 [f] [SL] 21,600.00 The second year's depreciation

is calculated.

[x<Oy] 64,800.00 The remaining depreciable

value is displayed.

3 [f] [SL] 21,600.00 The third year's depreciation

is calculated.

[x<Oy] 43,200.00 The remaining depreciable

value is displayed.

4 [f] [SL] 21,600.00 The fourth year's depreciation

[x<y] 21,600.00 The remaining depreciable

value.

5 [f] [SL] 21,600.00 The fifth year's depreciation.

[x<>y] 0.00 The remaining depreciable

value.

O11. Calculate a 5-year, 150% declining-balance depreciation schedule for

the same computer system.

5-84
Keystrokes Display

150 [i] 150.00 The declining-balance factor

is stored.

1 [f] [DB] 35,400. 00 The first year's depreciation

is calculated.

[x<y] 72,600 .00 The remaining depreciable

value after the first year is
displayed.

2 [f] [DB] 24,780 .00 The second year's

depreciation.

[x<Oy] 47,820 .00 The remaining depreciable

value after the second year.

3 [f] [DB] 17,346 .00 The third year's depreciation.

[x<>y] 30,474 .00 The remaining depreciable

value after the third year.

4 [£] [DB] 12,142. 20 The fourth year's

depreciation.

[x<Oy] 18,331 .80 The remaining depreciable

value after the fourth year.

5 [f] [DB] 18,331 .80 The fifth year's depreciation.

[x<Oy] 0.00 The remaining depreciable

value after the fifth year.

5-85
Chapter 5 Summary

¥ [f] [SL] computes the amount of depreciation on a straight-line basis.

Reference: Pages 5-80 - 5-82, steps 3-8.

¥ [f] [DB] computes the amount of declining balance depreciation.

Reference: Pages 5-80 - 5-82, steps 3-8.

* [f] [SOYD] computes the amount of depreciation using the sum-of-the-

years-digits method. Reference: Pages 5-80 - 5-82, steps 3-8.

5-86
Review Test for Chapter 5
The answers are on Page 5-88, immediately following this review test.

A property has been acquired for $250,000. The purchase price is

allocated to $50,000 for land (non-depreciable) and $200,000 for
improvements (building, etc.). The remaining useful life of the
building is determined to be 30 years with no estimated salvage
value. Calculate the amount of depreciation and the remaining
depreciable value for each of the first 2 years assuming 150% declining
balance.

Keystrokes Display

5-87
Answers to Review Test for Chapter 5

1. Keystrokes Display Reference

[f] CLEAR [FIN] (Page 5-82, step 8)

200000 [PV] 200,000.00

30 [n] 30.00
0 [FV] 0.00
150 [i] 150.00
1 [f] [DB] 10,000.00 Amount of depreciation in
year 1.

[x<y] 190,000.00 Remaining depreciable value

at end of year 1.

2 [f] [DB] 9,500.00 Amount of depreciation in

year 2.

[x<Oyl 180,500.00 Remaining depreciable value

at end of year 2.

5-88
NOTES

5-89
 Chapter 6

Bond Calculations

Preview

In Chapter 6 you will:

* Perform bond price and yield computations.

() 1. The HP-12C has two keys dedicated to bond calculations: [PRICE] (price)
and [YTM] (yield to maturity).

AMORT
L
_INT NPV
z
II
iR

PR!CE YTM
e I I=2
DEPRECIAT\ON
DATE ) BEG END MEM

I 2aas
FRAC INTG A DYS D
MY ) M.DY )}

CREnajEess
AR———————————
F'RGM FIN REG PREFIX

g reclissas
HEWLETT-PACKARD

Locations of [f][PRICE] and [f][YTM]

Figure 39

() 2. A bond is a written agreement to pay periodic interest payments, called

coupons, for a specified period of time, plus an amount to be paid
when the bond matures (the redemption value).

() 3. When you purchase a bond, you are buying the right to receive a
number of future cash flows.

() 4. The price of a bond is expressed as a percentage of the dollar value.

() 5. Conventional U.S. bonds pay interest payments (coupons) every 6 months.

This convention of semi-annual coupons is assumed in the HP-12C's
bond calculations.

6-90
() 6. The redemption value of a bond is assumed to be 100% of $1000.

() 7. For example, an investor who on January 15, 1981 purchased a $1000,

14 1/2% bond redeemable on July 15, 1991 will receive:

a. 21 semi-annual payments of $72.50, the first one received on

July 15, 1981.

b. $1000 on July 15, 1991.

The cash flow diagram would look like this:

FV=$1000

i=14.5/2%

PMT=%$72.50

[ [ ]

PV=$-1000
Figure 40

() 8. However, unlike the previous example, most bonds are not purchased
on an interest or coupon payment date. When a bond is purchased
between coupon dates, a portion of the next coupon is paid to the
seller of the bond.

() 9. For example, if a bond is sold after three-fourths of the coupon

period has passed, the seller would receive three-fourths of the next
coupon payment. The buyer pays the price of the bond plus three-
fourths of the next coupon --- this amount is called the accrued
interest.

6-91
()10. The generalized bond cash flow diagram looks like this:

FV=Redemption value

PMT=Coupon/2

Settlement |
Date i T
1
[ 1 2 3 n

Y
PV=Purchase
price

Figure 41

()11. All bond calculations on the HP-12C assume an actual calendar year.
Bonds of this type include U.S. Treasury Bonds and Notes, Treasury
Certificates of Indebtedness, and FHA Debentures. Bonds based on a
360-day calendar year (corporate bonds, municipal bonds, etc.) must
be evaluated using a program (see Section 16 of the HP-12C Owner's
Handbook and Problem-Solving Guide).

()12. Example: What price should you pay on January 12, 1982 for a 13 3/4%
bond that matures on June 1, 1996, if you desire a yield of 14 1/2%?

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared. ¥

[g] [M.DY] The calendar format is set to

"month, day, year."

14.5 [i] 14.50 The yield to maturity is

stored.

13.75 [PMT] 13.75 The coupon rate is stored.

¥ The bond calculations do not require you to clear any registers.

However, as a general routine, you might wish to clear the financial
registers before starting any financial calculation.

6-92
 1.121982 [ENTER] 1.12 The settlement date is
entered. ¥

6.011996 6.011996 The maturity date is keyed in.

[f] [PRICE] 95.48 The bond price is calculated.

[x<Oy] 1.59 The accrued interest is

displayed.

[+] 97.06 The total price, including

accrued interest, is
calculated. Remember that this
price is expressed as a
percentage.

()13. Use the following procedures to determine the price of a bond.

1. Press [f] CLEAR [FIN].

Set the calendar format to [M.DY].

. Key in the desired yield to maturity and press [i].

Key in the annual coupon rate (as a percentage) and press [PMT].

Key in the settlement (purchase) date in the format MM.DDYYYY and

press [ENTER].

Key in the maturity (redemption) date in the format MM.DDYYYY.

Press [f] [PRICE]. The price is shown in the display.

(Optional) Press [x<>y] to display the amount of accrued interest.

. Press [+] to add the interest to the price and determine the total
price to be paid.

()14, Given the following U.S. Treasury Bond, find its total price (including
accrued interest):

Settlement date October 1, 1981; maturity date December 15, 1990;

coupon rate 14%; yield to maturity 15.75%.

¥ Remember from Chapter 2 (step 22) that although the entire number is
stored in the calculator, it is displayed with only 2 decimal places.

6-93
 Keystrokes Display

[f] CLEAR [FIN] 97.06 The financial registers are

cleared.

15.75 [i] 15.75 The yield is stored.

14 [PMT] 14.00 The coupon rate is stored.

10.011981 [ENTERI] 10.01 The settlement date is

entered.

12.151990 12.151990 The maturity date is keyed in.

[f] [PRICE] 91.58 The price is calculated.

[+] 95.71 The total purchase price is

calculated.

0O15. The market is quoting 96 3/8 for the bond described in the preceding
example. What yield will that provide?

Keystrokes Display

3 [ENTER] 8 [/] 0.38

96 [+] 96.38 The price is calculated.
[pPV] 96.38 The price is stored.

The coupon rate is still

stored in the [PMT] register,
so it does not need to be
re-entered.

10.011981 [ENTER] 10.01 The settlement date is

entered.

12.151990 12.151990 The maturity date is keyed in.

[f] [YTM] 14.72 The percent yield is

calculated.

()16. To determine the yield to maturity of a bond, use the following

procedure:

1. Key in the quoted price (as a percent of 100) and press [PV].

2. Key in the annual coupon rate and press [PMT].

3. Key in the settlement (purchase) date in the format MM.DDYYYY and

press [ENTER].

6-94
 4, Key in the maturity (redemption) date in the format MM.DDYYYY.

5. Press [f] [YTM]. The percent yield to maturity is shown in the

display.

Note: The [YTM] function may take a significant amount of time

to produce an answer, during which the calculator displays

running

()17. Find the yield of the following U.S. Treasury Note:

Settlement date August 18, 1981; maturity date January 1, 1987;

interest rate 14.25% (coupon); price 99.52.

Keystrokes Display

[(f] CLEAR [FIN] 14,72 The financial registers are

cleared.

99.52 [PV] 99.52 The price is stored.

14.25 [PMT] 14.25 The coupon is stored.

8.181981 [ENTER] 8.18 The settlement date is

entered.

1.011987 1.011987 The maturity date is keyed in.

(f] [YTM] 14.37 The percent yield is

calculated.

6-95
Chapter 6 Summary
* A bond pays coupons every 6 months for a pre-determined period of
time, and pays 100 (100% of $1000) at the maturity date.
Reference: Pages 6-90 - 6-91, steps 2-3, 5-6.

[f] [PRICE] determines the price of a bond and the amount of accrued
interest. Reference: Pages 6-92 - 6-93, steps 12-14.

[f] [YTM] determines the yield-to-maturity of a bond.

Reference: Pages 6-94 - 6-95, steps 15-17.

6-96
Review Test for Chapter 6
The answers are on Page 6-98, immediately following this review test.

1. What price (including accrued interest) should you pay on

September 28,1981 for a bond that matures on June 1, 1995, and pays a
coupon of 15 3/4% if you wish a yield of 17%?

Keystrokes Display

2. If the above bond is purchased for 95 what is the yield?

Keystrokes Display

6-97
Answers to Review Test for Chapter 6

1' Keystrokes Display Reference

17 [i] 17.00 (Page 6-93, step 13)

15.75 [PMT] 15.75

9.281981 [ENTER] 9.28

6.011995 [f] [PRICE] 93.36

[+] 98.48 Price including accrued

interest.

Keystrokes Display Reference

95 [PV] 95.00 (Page 6-94, step 16)

9.281981 [ENTER]
6.011995 [f] [YTM] 16.68 Percent yield to maturity.

6-98
NOTES

6-99
 Chapter 7

What is a Program?

Preview

In Chapter 7 you will:

* Learn what a program is and the advantages of programming.

* Create and run a simple program.

0 1. A program is a sequence of keystrokes that is remembered by the

calculator.

() 2. When you need to repeat the same sequence of keystrokes several times,
a program could save you a great deal of time.

Instead of pressing all the keys each time, you only need to press one
Key to start the program --- the calculator does the rest.

The HP-12C has three keys which are necessary to key in and run a
program: [f1[P/R] (to set the calculator to program mode or run mode),
[f] CLEAR [PRGM] (to clear program memory), and [R/S] (to run (start)
and stop a program).

l \
lNT
PV PM FVJ CHS
12x» 12— SIS HEG\ ”END“; ”MEM’ ”

IE!H!EI
DEPRECIAT{ON——j
PRICE YTM

LN S @ S OINd o oTE \"

rECES 2
PRGM FIN REG
PREF]X

L @S GTO X<y x=0 I @T

O reElesEEs
HEWLETT-PACKARD

Locations of [f][P/R], [f] CLEAR [PRGM], and [R/S]

Figure 42

7-100
() 5. Example: An office supply dealer is selling selected stock at 25% off.
An additional $5 handling charge is to be added to each transaction.
Create a program which calculates the net cost of an item after the
discount is subtracted and the handling charge is added.

First, write down the steps to manually calculate the net cost of an
item listing for $300 (this will also serve as a check solution after
the program is written).

Keystrokes Display

300 [ENTERI] 300.00 The cost of the item is keyed

in and separated from the next
entry.

25 [%] 75.00 The amount of discount is

calculated.

(-] 225.00 The price less discount is

calculated.

5 5. The handling charge is keyed

in.

[+] 230.00 The net cost (price less

discount plus handling charge)
is calculated.

Next, set the calculator to program mode and erase any program(s)
already stored:

Keystrokes Display

[f] [P/R] 00- Program mode is set. Notice

the program mode annunciator
(PRGM) in the display.

[f] CLEAR [PRGM] 00- Previous programs are

cleared. ¥

Finally, press the keys that you used above to solve the program
manually. Do not key in 300 as this number will vary each time the
program is used. (Don't be concerned about what appears in the display
as you press the keys - you will learn about these keycodes in
Chapter 8.)

* You must be in program mode for [f] CLEAR [PRGM] to clear previous
programs.

7-101
Keystrokes Display

[ENTER] 01- 36

2 02- 2

5 03- 5

(%] 04~ 25 b Program line number and

keycode (position of key)
(-] 05- 30

5 06- 5

[+] 07- 40

Now run the program above using the check solution calculated in step
5.

Keystrokes Display

(f1(P/R] 230.00 Run (calculator) mode is set.

The display shows the number
previously calculated.

300 300. The cost is keyed in.

[R/S] 230.00 The net cost is calculated.

Calculate the net cost of a typewriter listed for $895.

Keystrokes Display

895 895. The cost of the typewriter is

keyed in.

[R/S] 676.25 The net cost of the typewriter

is calculated, and agrees with
the check solution.

What is the net cost of an executive chair listing for $189?

Keystrokes Display

189 189. The cost of the chair is

keyed in.

[R/S] 146.75 The net cost of the chair is

calculated.

7-102
 create a program:

Write down the sequence of keystrokes that you would use to do the
desired calculation.

Press [f] [P/R] to set the calculator to program mode. The program
status indicator (PRGM) is displayed when the calculator is in
program mode.

Press [f] CLEAR [PRGM] to erase any previous programs that may be
stored.

. Key in the sequence of keystrokes which you wrote down in step 1.

Skip the keystrokes that enter data which would differ each time
the program is used.

run (or execute) a program:

Press [f] [P/R] to set the calculator back to run (calculator)

mode.

. Key in any required data.

3. Press [R/3] (run/stop) to begin program execution.

(10. Calculator programming is as simple as pressing the keys you would
manually press to solve your problem. But even though the HP-12C
calculator programming is simple to understand and use, it is a very
powerful tool, giving you the capability to tackle complex problems
with confidence.

7-103
Chapter 7 Summary

A program is a sequence of keystrokes remembered by the calculator.

s

Reference: Page 7-100, step 1.

% [f] [P/R] sets the calculator to program or run (calculator) mode.

Reference: Page 7-100, step 4.

* [f] CLEAR [PRGM] clears program memory.

Reference: Page 7-100, step 4.

[R/S] runs (starts) and stops a program. Reference: Page 7-100, step 4.

7-104
Review Test for Chapter 7

The answers are on Page 7-106, immediately following this review test.

1. What is a program?

2. What are the U4 basic steps to create a program?

3. Which steps are necessary to run a program?

7-105
Answers to Review Test for Chapter 7

1. A program is a sequence of keystrokes that is remembered by the

calculator. (Page 7-100, step 1)

2. To create a program:

1. Write down the keystrokes to do the problem manually.

2. Set program mode by pressing [f] [P/R].
3. Press [f] CLEAR [PRGM] to clear the previous program.
4, Key in the keystrokes from step 1.
(Page 7-103, step 8)
To run a program:

1. Press [f] [P/R] to set the calculator to run mode.

2. Key in any required data.
3. Press [R/S] to begin program execution.
(Page T7-103, step 9)

7-106
NOTES

7-107
 Chapter 8

Programming Basics
Preview

In Chapter 8 you will:

¥ Identify instructions in program lines.

* Step through a program.

* Observe how program memory can be expanded.

¥ Go to any line of a program.

() 1. Let's turn our attention to the program from Chapter 7 to explain the
information displayed in program mode. If it has been some time since
Chapter 7 was studied, you should re-do steps 5-7 on pages 7-100 thru
T7-102.

() 2. First put the calculator in program mode.

Keystrokes Display

(f] [P/R] 00-

You are at the beginning of program memory. (Pressing [f][P/R] again

will put you in run mode; [P/R] switches into and out of program mode.)

() 3. You will be using the [SST] (single step) key to display each step of
the program.

J (D]
(12C])

AMORT _INT NPV RND R

aBE
2 X s /CFo ZSEREa
DATE) 23] END )] IS

HiasNoee e
PRICE YTM ospnscmnoufi

RoEBaE] T
FRAC INTG ADYS D.MY M.DY Y) [
————————CLEAR——————————
PRGM FIN HEG
PREFIX

PSE 238 GTO = ) EE N Ll A [l )

- Jafealo ks CEET
[
HEWLETT-PACKARD
- a P En) - )

Location of [SST]

Figure 43

8-108
() 4. Press [SST] once. The display will change to:

01- 36
PRGM

() 5. The two digits displayed on the left designate the line number of
program memory. Lines 01 through 99 are available for the program.
The above display designates line 01.

() 6. The two digits displayed on the right designate the keycode of the
instruction stored in that line. The first digit denotes the row of the
key (numbered 1 to 4 from the top to the bottom) and the second digit
the number of the key in that row (numbered 1, 2, ... , 9, O from left
to right). So, 36 tells you that the key is in the third row on the
calculator and that it is the sixth key from the left in that row, the
[ENTER] key.

T
R N

12
X) 12— DATE BEG END MEM
DEPRECIAT{ON—\
PRICE YTM

LN FRAC INTG DYS

Ay D. MY MDY )
CLE. AR
PRGMFINREG PREFIX
R/S SST I =8 ;

- -Es sesa
sixth key

E N &= T
HEWLETT-PACKARD

[ENTER] Has Keycode 36

Figure 444

() 7. Each key on the keyboard has a two-digit keycode, except for the
number (digit) keys. For convenience, the digit keys, and their
respective shifted functions, are coded O through 9. All other
keys are coded by their position on the keyboard.

() 8. Press [SST] once more. The display will show:

8-109
 02- 2
PRGM

The instruction in program line 02 is the digit 2.

() 9. The [BST] (back step) key steps back to display the contents of the
previous line of program memory.

‘ - e}
PRGM
(@]

SEXTTILLLEL
AMORT _INT NPV RND

i CFo LN BEG END )] LISV

IEEMQEIE = FRAC INTG ) D.MY (D EA)

2 @D
A ——
P/R PRGM FIN REG REFIX

13 GTO E x=0

-Jealg-- a@g@@
HEWLETT-PACKARD
) ) S - )

Location of [g][BST]

Figure 45

()10. Press [gl][BST] and see:

01- 36
PRGM

()11. Press [g][BST] again and see:

00-
PRGM

8-110
0O12. Pressing [SST] (single step) while the calculator is in program mode
advances the calculator to the next line in program memory, then
displays that line number and the keycode of the instruction stored
there.

()13. Pressing [g][BST] (back step) while the calculator is in program mode
sets the calculator back to the previous line in program memory, then
displays that line number and the keycode of the instruction stored
there.

()14, If either the [SST] or the [BST] key is held down, the calculator
displays all of the lines in program memory. Press [SST], holding it
down until program line 07 is displayed.

Keystrokes Display

[SST] 01- 36 Program line 01.

Release [SST] 07- 40 Program line 07.

Program line 07 contains the last instruction you keyed into program
memory. However, if you press [SST] again, you will see that there
is another line stored in program memory:

Keystrokes Display

[SST] 08- 43,33 00 Program line 08.

()15. The instruction in program line 08 is [g] [GTO] 00. This tells the
calculator to "go to" program line 00. Although line 00 does not
contain a regular instruction, it does contain a "hidden" instruction
that tells the calculator to halt program execution.

()16. Thus, after the program is run, the calculator goes to program line 00
and halts, ready for you to key in new data and run the program again.

0O17. When you press [f] [P/R] to set the calculator from program mode to
run mode, the calculator is also automatically set to program line 00.

()18. If no instructions have been keyed into program memory, or if

[f] CLEAR [PRGM] is pressed, the instruction [g] [GTO] 00 is auto-
matically stored in program lines 01 through 08. As you Kkey each
instruction into program memory, it replaces the [g] [GTO] 00
instruction in that program line.

8-111
()19. When you clear the calculator of previous programs ([f] CLEAR [PRGM]),
you have eight lines of program memory available and 20 data storage
registers. The memory is allocated like this:

Program Memory Storage Registers

00- Register O (Rg)

01- Register 1 (R4)
02- .
03- )
04- Register 9 (Rg)
06- Register .0 (R o)
06- .
07- .
08- :
Register .8 (R g)
Register .9 (R g)

Figure 46

8-112
()20. As you key in the ninth program line, storage register R.9 (recall from
Chapter 1 that R.9 is the last storage register) is converted to seven
lines of program memory. The instruction you key in is stored in
program line 09, and the instruction [g] [GTO] 00 is already stored
in program lines 10 through 15. The memory allocation would then look
like this:

Program Memory Storage Registers

00- Register O (Rg)

01- Register 1 (R4)

09- Register .6 (R g)
10- Register .7 (R 7)
11- Register .8 (R g)
12- Register .9 (R o)
L
13-
14-
15-

Figure U7

8-113
0O21. Each time you use seven more lines of programming, the calculator
automatically converts the bottom storage register into program memory.

()22. The [MEM] (memory map) function describes the current memory
allocation.

L &
AMORT INT NPV RND R

BEEE
(12 X)) - S|
DATE BEG =N MEM

n@nmg%@@@E
PR|CE YTM
rh‘DEPRECIATION

L INTG NS IS T YD G

eB EEEE
T
P/R PRGMFINREG
REFIX

PSE ) BST GTO r<y' =D

o Ecloome
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HEWLETT-PACKARD
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Locations of [g][MEM] and [gl][GTO]

Figure 48

()es. To determine how many program lines (including those containing

[g] [GTO] 00) are currently in program memory, and how many storage
registers are currently available for conversion to program lines
or for data storage, press [g] [MEM]. When you press [g] [MEM] after
program memory has been cleared, the display will show:

P-08 r-20

Available program Available storage

lines registers

()24. As long as you are pressing [MEM] the memory allocation will be
displayed. When you let go of the [MEM] key, the calculator returns
to the original display.

()a5. The [MEM] function can be used at any time to see the number of lines
available for programming and the number of registers available for
storing data.

()26. Up to 99 instructions can be stored in program memory. Doing so would

require the conversion of 13 data storage registers (because
9 =8+ [ 13x7 1), leaving 7 storage registers --- RO through

8-114
 R6 --- available for data storage.

0a7. There may be occasions when you will want to set the calculator to a
particular program line. Although [SST] can be used, as described
previously, you can do so more quickly with the [GTO] (go to) key.

()28. For example, assuming that the calculator is still in program mode,
you can set it to program line 04 as follows:

Keystrokes Display

[g] [GTO] [.] o4 ol 25 Program line 0OU4.

029. In program mode, pressing [g] [GTO] [.] followed by two digit keys
sets the calculator to the program line specified by the digit keys.
The display shows that line number and the keycode of the instruction
stored there. (If the decimal point key is not used, the [GTO]
instruction will be recorded in program memory.)

()30. In run mode, pressing [g] [GTO] (or [gl[GTOI[.]) followed by two digit
keys sets the calculator to the program line specified by the digit
keys. The line number and keycode are not displayed as the calculator
is not in program mode, but pressing [f][P/R] does display the
specified line number and keycode.

8-115
Chapter 8 Summary

% [SST] can be used (in program mode) to display a program one line at
a time. Reference: Page 8-108, step 3.

¥ 99 lines of program memory are available. Reference: Page 8-109, step 5.

* [g][BST] is used (in program mode) to display the previous line of

program memory. Reference: Page 8-110, step 9.

* [g][GTO] 00 is placed in each line of program memory when [f]CLEAR[PRGM]

is pressed. Reference: Page 8-111, step 18.

% As more program memory is needed, one storage register is converted to

seven lines of programming. Reference: Pages 8-113 - 8-114, steps 20-21.

% [g] [MEM] describes the current memory allocation.

Reference: Page 8-114, steps 22-25.

% [g] [GTO] can be used to set the calculator to any program line.
Reference: Page 8-115, steps 27-30.

8-116
Review Test for Chapter 8

The answers are on Page 8-118, immediately following this review test.

1. While keying in a program, the display looks like this:

00-
01- 36
02- 6
03- 25
04- 40
05- 2
06- 48
07- 5
08- 40

Which keys are being pressed?

2. How many program lines is each storage register equivalent to?

3. List 3 ways to set the calculator to a specific program line.

8-117
Answers to Review Test for Chapter 8

1. Keystrokes Display Reference

(f] [P/R] 00- (Page 8-109, step 6)

[f] CLEAR [PRGM] 00-
[ENTER] 01- 36
6 02- 6
(%] 03- 25
[+] 04~ 40
2 05~ 2
. 06- 48
5 07- 5
[+] 08- 40

Each storage register is equivalent to 7 lines of program memory.

(Pages 8-113 - 8-114, steps 20-21)

There are actually five ways to set the calculator to a specific

program line:

In program mode, press either

a. [SST] as many times as necessary.
or b. [g][BST] as many times as necessary.
or c. [gl[GTOI[.] and the two digit keys representing the line number.

In run mode, press either

a. [gl[GTOI[.] , two digit keys, and [f1[P/RI.
or b. [gl[GTOl, two digit keys, and [f][P/R].
(Page 8-108, step 3, page 8-111, step 13, page 8-115, steps 27-30)

8-118
NOTES

8-119
 Chapter 9

Writing a Second Program

Preview

In Chapter 9 you will:

¥ Write and run a program that displays intermediate results.

O 1. Just as each of us writes in his own way, we each program in a unique

style. While there are many correct ways to write a program, the
solutions presented in this course show only one approach. The goal
is to have a program do the job correctly --- how the program does it
is of secondary importance.

. To further explore the programming capabilities of your calculator,

we will write a program to help you complete the amortization schedule
for the first 4 months of a $55,000, 14%, 30 year mortgage:

Month Number Payment Interest Principal Remaining Balance

1 ? ? ? ?

2 ? ? ? ?

3 ? ? ? ?

Y ? ? ? ?

. The information for the first month could be solved manually by

pressing the following keys:

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared.

[g] [END] END mode is set.

30 [g] [12x] 360.00 The total number of payments

is stored.

14 [g] [12/] 1.17 The monthly interest rate

is stored.

55000 [PV] 55,000.00 The loan amount is stored.

9-120
[PMT] -651.68 The monthly payment amount
is calculated.

0 [n] 0.00 The n-register is cleared.

1 [f] [AMORT] -641.67 The interest portion of the

payment is calculated.

[x<y] -10.01 The principal portion of the

payment is displayed.

[RCL] [PV] 54,989.99 The remaining balance is

displayed.

Now let's write a short program to replace the last three keystrokes
listed above ( 1 [f][AMORT], [x<>y], [RCLI[PV]). Before running this
program, values for n, PV, and PMT will first be calculated or keyed
in. Then the program will be run over and over again to calculate
succeeding monthly values for interest, principal, and remaining
balance. (Remember, after calculating the first month's interest
payment using 1 [f][AMORT], the second month's interest is also
calculated using 1 [f][AMORT].) Now enter the program by following
these keystrokes:

Keystrokes Display

[(f] [P/R] Program mode is set.

[f] CLEAR [PRGM] 00- Program memory is cleared.

1 01- 1

[f] [AMORT] 02- U2 11 To calculate the interest

portion.

[x<>y] 03- 34 To display the principal

portion.

[RCLI[PV] 04- 45 13 To display the remaining

balance.

Notice that in two instances you recorded two keystrokes, [f][AMORT]

and [RCLI[PV], into one line of the program. Earlier, you saw that the
four keystrokes in [g][GTO] 00 were also recorded in one line of
programming.

[fI[AMORT] and [RCLI[PV], like [g][GTO] 00, have merged keycodes to

conserve program memory. In every case where more than one key is
required to perform a single operation ([g][12x], [gl[END], [RCL] 1),
the keycodes are merged into one line of program memory.

9-121
() 7. Each operation, prefixed or not, requires only one line of program
memory.

O 8. To run the program you have just recorded, press the following keys:

Keystrokes Display

(f] [P/R] Run mode is set.

[f] CLEAR [FIN] The financial registers are

cleared.

[g] [END] The payment mode is set to

END.

30 [g] [12x] 360.00 The total number of payments

is stored.

14 [g] [12/] 1.17 The monthly interest rate is

stored.

55000 [PV] 55,000.00 The loan amount is stored.

[PMT] -651.68 The monthly payment amount

is calculated.

0 [n] 0.00 The n-register is cleared.

[R/S] 54,989.99 The remaining balance is

calculated. (What happened?)

The program didn't stop to show the amounts of interest and principal
calculated. The calculator executed each program line sequentially
until it reached the end of the program. Thus, only the final result
is displayed.

()10. There are two operations on your HP-12C that will interrupt program
execution when they are encountered as program instructions: [R/S]
(run/stop) and [g][PSE] (pause).

9-122
 AMORT
{[5193399
INT NF'
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rad e CHJ
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BEG END ) MEM ) ’
DEPREC\ATIONfi
PRICE YTM

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DYS .
D.MY ) M.DY .

fifimI
PRGM
z REG
PREFIX

o EE
PSE BST GTO X $y ) ,r 2 n

BN ED
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Locations of [R/S] and [g] [PSE]

Figure 49

O11. [R/S] works differently as an executed program instruction than it

does when pressed from the keyboard in run mode. As an executed
instruction, [R/S] stops program execution, allowing you to key in
new data or to write down an intermediate result.

O12. When [R/S] is pressed from the keyboard in run mode, the
calculator resumes program execution sequentially downward.

0O13. Now key in a new amortization program that will display the amount of
interest and principal in each payment, as well as the remaining
balance.

Keystrokes Display

(f] [P/R] Program mode is set.

[f] CLEAR [PRGM] 00- Program memory is cleared.

1 01- 1

[(f] [AMORT] 02- 42 11 To calculate the first month's

interest.

[R/S] 03- 31 To display the interest.

[x<y] Ol 34 To bring the principal to the

display (the X-register).

[R/S] 05- 31 To display the principal.

[RCLI[PV] 06- 45 13 To display the remaining

balance.

9-123
()14. Use the program to complete the following amortization schedule for a
$63,000 mortgage at 14.5% interest for 30 years.

Month Number Payment Interest Principal Remaining Balance

1 ? ? ? ?

? ? ? ?

? ? ?

? ? ?

Keystrokes Display

(f] [P/R] Run mode is set.

[f] CLEAR [FIN] The financial registers are

cleared.

63000 [PV] 63,000.00 The loan amount is stored.

30 [gll12x] 360.00 The total number of payments

is stored.

14.5 [gll12/] 1.21 The monthly interest rate is

stored.

[PMT] =T71.47 The monthly payment amount is

calculated (and automatically
stored into the PMT register).

0 [n] 0.00 The n-register is cleared.

[R/S] -761.25 The first month's interest is

displayed.

[R/S] -10.22 The first month's principal is

displayed.

[(R/S] 62,989.78 The remaining balance after

the first month is displayed.

[R/S] -761.13 Second month's interest.

[R/S] -10.34 Principal.

[R/S] 62,979. 44 Remaining balance.

[R/S] -761.00 Third month's interest.

9-124
 [R/S] -10.47 Principal.

[R/S] 62,968.97 Remaining balance.

[R/S] -760.88 Fourth month's interest.

[R/S] -10.59 Principal.

[R/S] 62,958.38 Remaining balance.

O15. In general, [R/S] is recorded into a program when you need to display
more than one answer at the end of a program. [R/S] is not necessary
when you want to display only one answer or the final answer of a series
Ssince the calculator automatically ends execution at line 00, ready to
begin again.

()16. A [PSE] (pause) instruction executed in a program interrupts program

execution for about 1 second. During the pause, the calculator
displays the last result calculated before the [PSE] instruction.

O17. If the duration of the pause is not long enough to write down the
number displayed, you can prolong the pause by using more than one
[PSE] instruction. Alternatively, you can have the program stop by
using [R/S] as described previously.

()18. To see how [PSE] can be used in a program, rewrite the amortization
program to briefly display the interest and principal for each monthly
payment.

Keystrokes Display

(f] [P/R]
[f] CLEAR [PRGM] 00-

1 01- 1

[f] [AMORT] 02- 42 11

(g] [PSE] 03- 43 31

[x<>y] Ol- 3y

(g] [PSE] 05- 43 31

(RCL] [PV] 06- 45 13

(0O19. Now return to run mode and execute the program using the example from
step 14.

9-125
Keystrokes Display

(f] [P/R] Run mode is set.

[f] CLEAR [FIN] The financial registers are

cleared.

63000 [PV] 63,000.00 The loan amount is stored.

4.5 [gll12/1] 1.21 The monthly interest rate is

calculated and stored.

30 [g] [12x] 360.00 The total number of payments

is calculated and stored.

[PMT] =TT71.47 The monthly payment is

calculated and stored.

0 [n] [R/S] -761.25 First month.

-10.22

62,989.78

[R/S] -761.13 Second month.

-10.34

62,979.44

[R/S] -761.00 Third month.

-10.47

62,968.97

[R/S] -760.88 Fourth month.

-10.59

62,958.38

9-126
Chapter 9 Summary
* Each operation, prefixed or not, requires only one line of program
memory. Reference: Pages 9-121 - 9-122, steps 6-T.

In run mode, [R/S] starts and stops program execution.

Reference: Page 9-123, steps 11-12.

[R/S] stops program execution when used as an instruction in a program.

Reference: Page 9-123, step 11.

[g][PSE] executed as a program instruction interrupts program execution

for about 1 second, displays the contents of the X-register, and then
resumes program execution.
Reference: Page 9-125, step 16.

9-127
Review Test for Chapter 9

The answers are on Page 9-131, immediately following this review test.

1. While keying in a program, the display looks like this:

00-
01~ 4 3
02- us5 2
03- 30
04- 20
05- 36
06- 36
07- u5 1
08- 30
09- 10

Which keys are being pressed?

2. Write a program to calculate the total cost of any item assuming a

6.5% sales tax and a handling charge of $2.00. The cost including tax
should be displayed briefly before the handling charge is added and
displayed. The program should assume that the original cost of the
item (without tax and handling charge) is in the display before
execution. Using your program, complete the following table:

Original Cost Cost + Tax Cost + Tax + Handling Charge

45,00 emmmmmm——— memememeeeee—

112.15 mmmmmmm——m e

98.37 mmmmemmeem e

9-128
3. An annual effective interest rate demonstrates the effect of compoun-
ding, for a full year of compounding periods, at a particular periodic
interest rate. The periodic interest rate to be used is determined by
dividing the stated nominal interest rate by the number of compounding
periods per year. The effect is such that if the nominal rate is held
constant, as the number of compounding periods per year is increased,
the annual effective interest rate will increase.

The following keystroke routine computes the effective annual interest

rate given a nominal interest rate and the number of compounding periods
per year.

1. Press [f] CLEAR [FIN].

2. Key in the nominal rate as a percentage and press [ENTER].

3. Key in the number of compounding periods per year and press

(n] [/] [i].

4, Key in 100 and press [CHS] [ENTER] [PV] [FV].

5. Press [+] to obtain the effective annual interest rate.

Example: What is the effective annual interest rate if the annual

nominal rate of 5 1/4% is compounded quarterly?

Keystrokes Display

[f] CLEAR [FIN] The financial registers are

cleared.

5.25 [ENTER] 5.25 The nominal interest rate is

entered.

4 [n] [/] [i] 1.31 The quarterly interest rate is

calculated and stored.

100 [CHS] [ENTER] -100.00

[PV] [FV] 105.35 An intermediate value is

calculated.

[+] 5.35 The percent effective rate is

calculated.

Now write a program that computes the effective annual interest rate.
The user would follow these instructions to execute the program:

1. Press [f] CLEAR [PRGM].

2. Key in the nominal rate as a percentage and press [ENTER].

9-129
3. Key in the number of compounding periods per year and press [R/S]
to obtain the effective annual interest rate.

HINT: Compare these user instructions with the keystroke routine shown
a few lines earlier. Notice that the user instructions include
some of the keystrokes shown in the routine. The remaining
keystrokes from the routine should appear in your program.

Next, test your program by using it to solve the above example (what
effective rate corresponds to a nominal rate of 5.25% compounded
quarterly?).

Keystrokes Display

9-130
Answers to Review Test for Chapter 9

1. Keystrokes Display Reference

[(f] [P/R] 00- (Pages 9-121 - 9-122,

[f] CLEAR [PRGM] 00- steps 5-7)
[RCL] 3 01- us 3
[RCL] 2 02- u5 2
[-] 03- 30
[x] 04~ 20
[ENTER] 05- 36
[ENTER] 06- 36
[RCL] 1 07- 45 1
[-] 08- 30
(/1] 09- 10

2. Keystrokes Display Reference

[£f1[P/R] 00- (Page 9-125, steps 16-17)

[f] CLEAR [PRGM] 00-
[ENTER] 01- 36
6 02- 6
. 03- 48
5 04~ 5
(%] 05- 25
[+] 06- 40
[gl[PSE] e 43 31
2 08- 2
[+] 09- 40

3. Keystrokes Display Reference

[(f] [P/R] (Pages 9-120 - 9-121,

steps 3-4)
[f] CLEAR [PRGM] 00-

[n] 01- 1

(/1] 02- 10

[i] 03- 12

1 04- 1

0 05- 0

0 06- 0

9-131
[CHS] 07~ 16

[ENTER] 08- 36

[PV] 09- 13
[FV] 10~ 15

(+] 1= 140
[(f] [P/R]

Example: What is the effective annual rate of interest if the annual

nominal rate of 5 1/4% is compounded quarterly?

Keystrokes Display

[f] CLEAR [FIN]

5.25 [ENTER] 5.25

4 [R/S] 5.35 The percent effective rate

is calculated.

9-132
NOTES

9-133
 Chapter 10

Editing a Program

Preview

In Chapter 10 you will:

* Execute a program one line at a time.

* Change a program.

* Key more than one program into program memory.

Finding the Error

() 1. Even the most experienced programmer finds errors in his programs.

Whenever errors occur, they need to be found and corrected. Your
HP-12C is designed to make this error-checking process as easy as
possible.

() 2. One of the easiest ways to determine if your program is working

properly is to work a test case in which you either know the answer or
the answer can easily be determined.

() 3. For example, if you have a program that calculates the sum of several
numbers and then finds the percent that each number is of the total
sum, you can easily determine whether the program works. Just enter
all like numbers (for example ten 10's) so that the percent total of
each number is the same (10 is 10% of 100).

[SST] Execution

() 4. In longer programs, a wrong test-case answer will seldom pinpoint a

mistake. For these cases, you can slow down program execution by
using [SST] (single step) in run mode.

() 5. In run (calculator) mode, [SST] will execute your program one line at a
time. When you hold the [SST] key down, in run mode, the program line
number and keycode are displayed. When you release the [SST] key, the
instruction is executed.

() 6. Use the following program to familiarize yourself with the [SST]

operation.

Example: This program computes the total cost of a mail-order item

when the sales tax is 6%.

10-134
Keystrokes Display

(f] [P/R]

[f] CLEAR [PRGM] 00-

[ENTER] 01- 36

6 02- 6

(%] 03- 25

[+] 04~ 40

[f] [P/R]
The program assumes that the cost of an item has been keyed into the
display. Step through the program using a value of $200 for the cost
of the item.

Keystrokes Display

200 200.

[SST] (press and hold) 01- 36 The keycode for the first
instruction, [ENTER], is
displayed when [SST] is
held down.

(release) 200 .00 When [SST] is released, the

[ENTER] instruction is
executed.

[SST] 02- The second instruction is

displayed when [SST] is held
down.

When [SST] is released, the

second instruction is executed

[SST] 03- 25 The third instruction is

displayed when [SST] is held
down.

12.00 When [SST] is released, the

third instruction is executed.

[SST] Oli— 40 The fourth instruction is

displayed when [SST] is held
down.

10-135
 212.00 When [SST] is released, the
fourth instruction is
executed.

[SST] 05- 43,33 00 The end of the program.

212.00 The total price is calculated.

You can see that it would be easy to spot a mistake in your program
using the [SST] key.

Changing One Program Instruction

0O 7. Because of its built-in features, changing or correcting one line of a

program is easy with your HP-12C. To change a single instruction in
program memory:

1. Press [f] [P/R] to set the calculator to program mode.

2. Use [SST1, [BST], or [GTO] [.] to set the calculator to the program
line preceding the line containing the instruction to be changed.

3. Key in the new instruction.

For example, in the previous program, change the sales tax rate at
line 02 to 7%.

Keystrokes Display

[f] [P/R] 00- Program mode is set.

[SST] 01- 36 Line 01 is displayed.

T 02- 7 The new tax rate is keyed in.

The 6 previously stored in program line 02 is replaced by 7.

. Now determine the total price to pay for a $100 item assuming a 7%
sales tax.

Keystrokes Display

(f] [P/R]

100 100. The price is keyed in.

[R/S] 107.00 The total price is calculated.

10-136
Adding Instructions at the End of a Program

()10. To add one or more instructions at the end of the last program stored
in program memory:

1. Press [f] [P/R] to set the calculator to program mode.

2. Press [g] [GTO] [.] followed by two digits that specify the last
line you keyed into program memory (that is, the highest numbered
line --- not necessarily the line most recently keyed in).

3. Key in the new instruction(s).

O11. In the previous program, add the necessary instructions to include a

$3.50 handling charge on each order.

Keystrokes Display

[f] [P/R] 00-

(gl [GTO] [.] o4 Ol4- 40

3.5 05- 3

06- 48

07- 5
[+] 08- 40

(f] [P/R]
O12. Determine the total price (including 7% tax and handling charge) of an
item costing $100.

Keystrokes Display

100 100. The price is keyed in.

[R/S] 110.50 The total cost is calculated.

Multiple Programs

0O13. You can store more than one program in program memory, as long as you
separate them with instructions which halt program execution after
each program is run.

()14, To run the first program, which starts at line 01, press [R/S] in run
mode if you have not run any previous programs. Otherwise, you will
need to press [g] [GTO] 01 [R/S].

10-137
()15. To run programs recorded later in program memory, set the calculator
to the first line of the program (using the [g] [GTO] instruction)
before pressing [R/S].

()16. For example, assuming that program memory still contains the total
cost program, store the amortization program from Chapter 9, step 13.

Keystrokes Display

(f]1 [P/R] 00- Program mode is set.

[g] [GTOI[.] 08 08- 40 The calculator is set to the

last line keyed into program
memory.

[g]l [GTO] 00 09- 43,33 Ensures that the second

program is separated from the
first.

1 10-

[f] [AMORT] 11- 42 The program is keyed in.

[R/S] 12- 31

[x<>y] 13- 34

[R/S] 14—~ 31

(RCL] [PV] 15- 45 13

[R/S] 16- 31 To display the remaining

balance.

[g] [GTO] 10 17‘ 43,33 Go to line 10 for the next

period.

(f] [P/R] Run mode is set.

()17. With the two programs now stored in program memory, find the amount
of interest and principal for the first month of a $45,000 mortgage
at 16.75% interest with monthly payments of $638.10. What is the
remaining balance after the first payment?

10-138
 Keystrokes Display

[(f] CLEAR [FIN] The financial registers are

cleared.

45000 [PV] 45,000.00 The mortgage amount is stored.

16.75 [g] [12/] 1.40 The monthly interest rate is

stored.

638.10 [CHS] [PMT] -638.10 The monthly payment amount is

stored.

[g] [GTO] 10 Go to line 10 (the first line

of the amortization program).

[R/S] -628.12 The first month's interest is

calculated.

[R/S] -9.98 The first month's principal is

displayed.

[R/S] 44,990.02 The remaining balance is

displayed.

()18. To verify that the first program is still in program memory, determine
the total cost of a jacket listed for $100.

Keystrokes Display

100 100. The price is keyed in.

[g] [GTO] 01 100.00 Go to line 01 (the beginning

of the program).

[R/S] 110.50 The total cost is calculated.

10-139
Chapter 10 Summary

The easiest way to determine if your program is working correctly is

to try a test case where the correct answer is known.
Reference: Page 10-134, step 2.

* [SST], in run mode, will execute a program one line at a time.

Reference: Page 10-134, step 5.

¥ To change one line of a program, set the calculator to the line

preceding the line to be changed, and key in the new instruction.
Reference: Page 10-135, step 7.

*¥ To add instructions at the end of a program, go to the last line of the

program currently in program memory and key in the new instruction(s).
Reference: Page 10-137, step 10.

# Tt is possible to store more than one program in program memory.

Reference: Page 10-137, step 13.

* To run a second program stored in program memory, use [g] [GTO] to set
the calculator to the first line of the program and press [R/3].
Reference: Page 10-138, step 15.

10-140
Review Test for Chapter 10
The answers are on Page 10-143, immediately following this review test.

Edit the amortization program currently in the calculator (see Page

10-138, step 16) to "pause" the remaining balance at the end of each
period.

2. Now edit the amortization program to "pause" the period number of the
next amortization schedule to be computed.

HINT: When [f] [AMORT] is used to calculate the principal portion,

interest portion, and remaining balance, for one or a series
of payments, storage register n automatically contains the
number of the last period amortized, assuming that O is stored
in n before [f] [AMORT] is used.

10-141
Write a program which converts a temperature in degrees Fahrenheit to
degrees Celsius. Then write a second program in program memory to
convert degrees Celsius to degrees Fahrenheit. The following formulas
should be used:

F=(18xC)+32

where F degrees Fahrenheit

C degrees Celsius

Hint: To convert degrees Fahrenheit to degrees Celsius, the following

keystrokes would be used:

1. Key in the temperature in degrees Fahrenheit; press [ENTER].

2. Key in 32; press [-].

3. Key in 1.8; press [/]. The temperature in degrees Celsius is

displayed.

10-142
Answers to Review Test for Chapter 10

1. Keystrokes Display Reference

[f] [P/R] 00- (Page 10-136, step 7)

[g] [GTO] [.] 15 15- 45 13
[g] [PSE] 16 43 31
[f] [P/R]
2. Keystrokes Display Reference

[f] [P/R] 00- (Page 10-137, step 10)

[g] [GTO] [.] 16 16- 43
[RCL] [n] 17- 45
1 18-
[+] 19-
[g] [PSE] 20- 43
[g] [GTO] 10 21- 43,33
[(f] [P/R]
3. Keystrokes Display Reference

[(f] [P/R] (Pages 10-137 - 10-139,

[f] CLEAR [PRGM] 00- steps 13-18)
[ENTER] 01- 36
02-
R =W

3
03- 2
-] 04~ 30
05- 1
/] 06- 48
07- 8
[/] 08- 10
[g] [GTO] 00 09" 43 ’ 33 00
[ENTER] 10- 36
1 11- 1
[.] 12- 48
8 13- 8
[x] 14- 20
3 15- 3
2 16- 2
[+] 17- 40
[f] [P/R]
To convert degrees Fahrenheit to degrees Celsius:

1. Key in the Fahrenheit degrees.

2. Press [R/S].

10-143
To convert degrees Celsius to degrees Fahrenheit:

1. Key in the Celsius degrees.

2. Press [g] [GTO] 10 [R/S].

10-144
NOTES

10-145
 Chapter 11

Decisions

Preview

In Chapter 11 you will learn about:

* Branching.

* Looping.

* Conditional branching.

Branching

() 1. The instructions in a program are normally executed in the order of

their program line numbers. However, in some situations it may be
desirable to have program execution transfer or "branch" to a program
line that is not in the next line of program memory.

() 2. The [GTO] (go to) instruction is used in a program to transfer

execution to any program line.

() 3. When the [GTO] instruction is executed, program execution branches or

"goes to" the program line specified and then continues sequentially.

01—(instruction)
02-(instruction)
03-(instruction)
(9] 02 causes program
04-(instruction) execution to branch to line 02.
05-(instruction)
06-(instruction)
07-[g)(GT0])02

Figure 50

() 4. A [GTO] instruction used in this way is known as an unconditional

branch. It always branches execution from the [GTO] instruction to
the specified two-digit line number.

11-146
Looping

() 5. A common use of a branch is to create a "loop" in a program. Key in

the following program which illustrates a counting loop.

Keystrokes Display

(f] [P/R]
[f] CLEAR [PRGM] 00-

(gl [PSE] 01- 43 31

1 02- 1

[+] 03- 40

[g] [GTO] 01 O4- 43,33 01

(f] [P/R]

() 6. To count from 1, press the following keys:

Keystrokes Display

1 [R/S] 1.00

2.00

3.00
4,00

5.00

6.00

etc.

The program will continue to count until you press [R/S].

() 7. Example: The following amortization program calculates the amount of

interest and principal for each period, and continues to compute until
you press [R/S] to stop program execution. Enter this program into
your HP-12C.

11-147
 Keystrokes Display

(f] [P/R] Program mode is set.

[f] CLEAR [PRGM] 00- Program memory is cleared.

0 01- 0
[nl] 02- 1 The n-register is cleared.

1 03- 1
[f] [AMORT] O4- 42 11 The first month's interest is
calculated.

(gl [PSE] 05- 43 31 The interest is displayed.

[x<>y] 06- 34
(g] [PSE] 07- 43 31 The principal is displayed.

[RCL] [n] 08- 45 N The number of periods amor-

tized is recalled.

1 09- 1
[+] 10- 40 The next period number is
calculated.

[g] [PSE] 1- 43 31 The next period number is

displayed.

[g] [GTO] 03 12- 43,33 03 Go to line 03 for the next

calculation.

(f] [P/R] Run mode is set.

. Before running the program, the required data must be stored. Assume
a $61,000 loan for 30 years at 14% interest (payments are made
monthly).

Keystrokes Display

[g] [END] END mode is set.

[f] CLEAR [FIN] The financial registers are

cleared.

61000 [PV] 61,000.00 The loan amount is stored.

30 [g] [12x] 360.00 The total number of payments

11-148
 is calculated and stored.

14 [g] [12/] 1.17 The monthly interest rate is

calculated and stored.

[PMT] =722.77 The monthly payment amount is

calculated and stored.

[R/S] -711.67 The first period's interest is

displayed.

-11.10 The first period's principal

is displayed.

2.00 Second year.

-711.54 Second period interest.

-11.23 Second period principal.

3.00 Third year.

=711.41 Third period interest.

-11.36 Third period principal.

4.00 Fourth year.

-711.27 -Fourth period interest.

-11.50 Fourth period principal.

eéc.

The program will continue until you press [R/S].

If you wish to write down the displayed values, you might want to
change each [g] [PSE] program step to [R/S].

Conditional Branching

() 9. There are times when you want a program to make a decision based on
certain conditions. For example, a program used by an accountant to
calculate taxes might need to branch to different program lines
depending on the tax rate for the particular income level.

()10. The HP-12C provides two instructions that are used in programs for

11-149
 a branch that depends on the outcome of a test (a conditional branch):
[X=0] (X equal to 0?) and [XY] (X less than or equal to Y?).

|
=
AMORT _INT

IIDII
a3

PRICE YTM
DEPREC\ATION
DATE BEG END MEM

EpEpaEREEEE FRAC INTG (A DYS) D.MY M.DY =

EEE.jeoas
- CLEAR—————————
PRGM FIN REG PREFIX

PSE S GTO 23] x=0 X,r )] M @ | )

oo sElosEEg
HEWLETT+-PACKARD

Locations of [gl[X<Y] and [g][X=0]

Figure 51

0O11. [X=0] tests whether the number in the display (the X-register) is equal
to zero.

0O12. [X<Y] tests whether the number in the display (the X-register) is less
than or equal to the number in the Y-register. The number in the
Y-register is the number that would have been keyed in first in a
two-number operation. For example, 4 [ENTER] 5 would place 4 in the
Y-register and 5 in the X-register.

()13. When it is encountered in a program, each of the instructions

essentially asks a question.

O14, If the answer is YES, program execution continues sequentially downward

to the next instruction in program memory.

0O15. If the answer is NO, the calculator branches around the next
instruction.

11-150
()16. For example:

Conditional Test
Yes

Figure 52

()17. After the conditional test, the calculator will do the next instruction
if the test is true. This rule is easier to recall as the "DO if TRUE"
rule.

()18. The line immediately following the conditional test can contain any
instruction. A commonly used instruction is a [GTO]
instruction. This branches program execution to another section of
program memory if the conditional test is true, and continues with the
next line in program memory if the condition is false.

01-
Condition 02-[g](x=0] Condition
is True 03-[g](GT0J07 is False
04-
05-
06-
07-

Figure 53

()19. Example: The following program counts backward from the number 5
and stops at zero by returning to the top of program memory.

Keystrokes Display

[f] [P/R] Program mode is set.

[f] CLEAR [PRGM] 00- Program memory is cleared.

5 01- 5 The number 5 is keyed in.

[g] [PSE] 02- 43 31 The number 5 is paused in

the display.

1 03- 1 The number 1 is keyed in.

(-] O4- 30 The number 1 is subtracted

from 5 --- you are counting

11-151
 backward.

[g] [X=0] 05- 43 35 Is the number equal to zero?

[g]l [GTO] 00 06- 43,33 00 If zero has been reached, stop

the program.

[g]l [GTO] 02 07- 43,33 02 If zero has not been reached,

go to line 02 and pause the
next number in the display.

[f] [P/R] Run mode is set.

To execute the program, press:

Keystrokes Display

[R/S] 5.00

4,00

3.00

2.00

1.00

0.00

()20. Example: This program calculates income tax at a rate of 20% on

incomes of $20,000 or less and 25% on incomes of more than $20,000.
To conserve program lines, the program assumes that the test value ---
$20,000 --- is stored in register RO and that the tax rates --- 20% and
25% --- are stored in registers R1 and R2 respectively.

NOTE: Before the program is run, the user keys into the display (the
X-register) the income whose tax is to be calculated. The user does
not press [ENTER]; [R/S] is pressed to start the program.

Keystrokes Display

[(f] [P/R] Program mode is set.

[f] CLEAR [PRGM] 00- Program memory is cleared.

[RCL] O 01- 45 0 The test value is recalled to

the display (the X-register)
and the income value, pre-

11-152
 viously in the X-register, is
moved to the Y-register.

[x<Oy] 02- 3y The test value is placed in

the Y-register and the income
is placed in the display
(the X-register).

[g] [X<Y] 03- 43 34 Is the income less than or

equal to the test value
($20,000)7?

(gl [GTO] 07 O4- 43,33 07 Branch to line 07 if the

condition is true.

[RCL] 2 05- 45 2 The 25% tax rate is recalled

to the display.

[g] [GTO] 08 06- 43,33 08 Branches to program line 08.

[RCL] 1 07- 4 1 The 20% tax rate is recalled

to the display.

(%] 08- 25 The tax is calculated.

(f] [P/R] Run mode is set.

021. Now, store the required numbers in registers RO, R1, and R2, and
calculate the amount of tax on incomes of $16,000, $20,000, and
$31,000.

Keystrokes Display

20000 [STO] O 20,000.00 The test value is stored in

register RO.

20 [STO] 1 20.00 The 20% tax rate is stored.

25 [ST0] 2 25.00 The 25% tax rate is stored.

16000 [R/S] 3,200.00 20% of $16,000 = $3,200.

20000 [R/s] 4,000.00 20% of $20,000 = $4,000.
31000 [R/s] 7,750.00 25% of $31,000 = $7,750.

11-163
()22. Here is a pictorial representation of what the program is doing:

Key in amount
of income

'
— Isincome
over $20,000?

Compute 25% Compute 20%

of income of income

Display tax

Flow Chart

Figure 54

11-154
Chapter 11 Summary
*
[g]l[GTO] is used to branch program execution to a specified line number.
Reference: Page 11-146, steps 2-4.

A conditional branch is a branch to another program line which depends

on the outcome of a test. Reference: Page 11-149, steps 9-10.

[g][X=0] tests whether the display (X-register) is equal to zero.

Reference: Page 11-150, step 11.

[g][X<Y] tests whether the X-register is less than or equal to the

Y-register. Reference: Page 11-150, step 12.

If the test is true, program execution continues to the next program

line. Reference: Page 11-150, step 14, page 11-151, steps 16-17.

If the test is false, the program skips the next program line and then
continues execution. Reference: Pages 11-150 - 11-151, steps 15-16.

11-155
Review Test for Chapter 11

The answers are on Page 11-158, immediately following this review test.

1. What is a conditional branch?

2. What happens when a conditional test is encountered in a program?

3. Write a program that will allow a salesman to compute his

commissions at the rate of 10% of sales to $2000, and 12.5% of
sales over $2000.

Calculate the commissions for sales of $625.00 and $2750.00.

HINT: Use the following user instructions:

1. Key in the amount of the sales.

2. Press [R/S] to calculate the amount of the commission.

11-156
4. Write a program which calculates the sum of the first 15 integers.
That is, what is 1+ 2+ 3+ . . . + 14 + 15? (Use a conditional
test to determine when to stop summing numbers.)

HINT:
a. Store the value of the integer being added in RO.
b. Store the current sum of the integers in R1.
c. Your program should start by putting initial values in RO and R1.

User Instructions: Press [R/S] and see the sum of the first 15
integers in the display when the program stops.

11-157
Answers to Review Test for Chapter 11

1. A conditional branch is a branch to another program line which depends

on the outcome of a test. (Page 11-149, step 10)

2. The tests X=0 and X<Y ask a question when encountered in a program
(is X equal to 0? and is X less than or equal to Y?). If the answer
is YES, the program continues to the next program line. If the
answer is NO, the calculator branches around the next program
instruction. (Page 11-150, steps 11-15)

3. Keystrokes Display Reference

(f] [P/R] (Pages 11-150 - 11-151,

steps 12-18)
[f] CLEAR [PRGM] 00-

[ENTER] 01- 36

2 02- 2

0 03- 0

0 04~ 0

0 05- 0

[x<yl 06- 34

(gl [X<Y] 07- 43 34

(gl [GTO] 14 08- 43,33 14

1 09- 1

2 10- 2

. 1= 48

5 12- 5

[g] [GTO] 16 13- 43,33 16

1 14~ 1

0 15- 0

(%] 16- 25

(f] [P/R]

11-1568
 Keystrokes Display

625 [R/S] 62.50

2750 [R/S] 343.75

. Keystrokes Display Reference

[f] [P/R] (Pages 11-150 - 11-151,

steps 12-18)
[f] CLEAR [PRGM] 00-

1 01- 1

[STO] O 02- 44 o

[STO] 1 03- 4y 1

1 O4- 1

5 05- 5

[RCL] O 06- 4 0

1 07- 1

[+] 08- 40

[STO] O 09- 44 0

[g] [X<Y] 10- 43 34

(gl [GTO] 13 11- 43,33 13

(gl [GTO] 17 12- 43,33 17

[RCL] 1 13- us 1

[+] 14- 40

[STO] 1 15- 4y 1

(g] [GTO] ou 16- 43,33 04

[RCL] 1 17- 45 1

(f] [P/R]

11-1569
To run the program, press [R/S].

Keystrokes Display

[R/S] 120.00 The sum of the numbers 1 to

15 is calculated.

11-160
NOTES

11-161
 Chapter 12

Where Do I Go From Here?

You have finished the course. Congratulations!

You have learned a lot about the HP-12C, but there are a few more areas
that you might wish to explore. The following topics can be found in the
HP-12C Owner's Handbook and Problem-Solving Guide:

* Storage Register Arithmetic (Section 1).

% 0dd Period Calculations (Section 3).

% Statistics Functions (Section 6).

Mathematical Functions (Section 7).

*

Adding Instructions Within a Program (Section 10).

L3

% The Automatic Memory Stack (Appendix A).

* Error Conditions (Appendix C).

Another way to improve your calculator skills is to study keystroke

procedures and programs written for specific applications. Sections 12-16
of the Owner's Handbook contains routines in the areas of Real Estate and
Lending, Investment Analysis, Leasing, Savings, and Bonds. In addition,
the HP-12C Solutions Handbook (00012-90009) provides a variety of
applications in the financial area. (Check with your local Hewlett-
Packard dealer for the availability of new HP-12C application books.)
These books, along with the Training Guide, will serve as a reference to
many of your problems and will show you how to redesign our examples to
fit your specific needs.

12-162
NOTES

12-163
 Index

The pages in parentheses denote chapter summaries.

Accrued interest 6-91, 6-93, (6-96)

Adding instructions 10-137, (10-140)
Alternate functions 1-10 - 1-11, (1-12)
[AMORT] 4-61, (4-74), 9-121
Amortization 3-41, 4-60 - U4-64, (U-TL)
Annuity due 3-41
Annunciators 1-11, 2-21, 3-38
Appreciation 3-41
Arithmetic keys 1-3
Automatic turn off 1-2

Backstep 8-110 - 8-111, (8-116), 10-136

[BEG] 3-37 - 3-38, (3-55)
BEGin mode 3-37 - 3-38, (3-55)
BEGIN status indicator 3-38
Bond price 6-93, (6-96)
Bonds 6-90 - 6-95, (6~96)
Bond yield 6-94 - 6-95, (6-96)
Branching 11-146
Branching, conditional 11-149 - 11-154, (11-155)
Branching, unconditional 11-146
[BST] 8-110 - 8-111, (8-116), 10-136

Calendar functions 2-24 - 2-28, (2-29)

Cash flow diagram 3-36, 3-40, (3-55)
Cash flow sign convention 3-39
[CFj] u4-67, (4-74)
[CFo]l 4-67, (4-T4)
Chain calculations 1-6
Changing one program instruction 10-136
[CHS] 1-3, (1-12)
Clearing display 1-4, (1-12)
Clearing financial registers 3-36, (3-55)
Clearing prefix keys 1-11

164
Clearing program memory 7-100, (7-104)
Clearing storage registers 1-9, (1-12)
[CLx] 1-=4, (1-12)
Compound growth 3-41
Compound interest 3-35 - 3-52
Conditional branching 11-149 - 11=154, (11-155)
Continuous Memory 1-2

Data storage registers 1-8, (1-12)

[DATE] ©2-24, 2-27 - 2-28, (2-29)
Date format 2-24, 2-25, (2-29)
Dates, days between 2-26, (2-29)
Dates, future or past 2-24, 2-27, (2-29)
Day, month, year format 2-24, 2-26, (2-29)
Day of the week 2-28
Days between dates 2-26, (2-29)
(DB] 5-80, 5-82, (5-86)
Decimal places, number of 2-25
Declining balance depreciation 5-80, 5-82, (5-86)
Depreciation 5-80 - 5-85, (5-86)
Depreciation, accelerated 5-81
Depreciation, amount of 5-82, (5-86)
Digit entry keys 1-3, (1-12)
Direct reduction loan 3-41, 4-60
Discounted cash flow analysis 4-64 - 4-73
Display 1-3, (1-12)
Display intermediate results 9-125, (9-127)
[D.MY] 2-24, 2-26, (2-29)
"DO if TRUE" rule 11-151

Editing a program 10-134 - 10-139

[END] 3-37 - 3-38, (3-55), 9-121
END mode 3-37 - 3-38
[ENTER] 1-4, 1-5, (1-12)
Error, finding the 10-134

[(f] 1-10 - 1-11, (1-12)

f annunciator 1-11
[FIN] 3-36, (3-55)
Financial registers 1-8, 3-36
Finding the error 10-134
Flow chart 11-154

165
Future dates 2-24, 2-27, (2-29)
Future value 3-35, 3-37, (3-55)
[FV] 3-357 3‘377 (3'55)

[g]l] 1-10 - 1=-11, (1-12)

g annunciator 1-11
[GTO] 8-115, (8-116), 11-146, (11-155)
[GTO] 00 8-111, 8-113, 8-114, (8-116), 9-121
[GTOo] [.1 8-115

[i] 3-35, (3-55)

[INT] 3-52, 3-54, (3-55)
Interest, compound 3-35 - 3-52
Interest, simple 3-34, 3-52 - 3-54, (3-55)
Internal rate of return 4-64 - 4-65, L4=-T71 - L4=73, (U-T4)
[IRR] 4-64 - U4-65, U471 - LU=T3, (4=T4)

Keycodes 8-109
Keying in a number 1-3, (1-12)

Lease 3-11
Lease with buyback 3-41
Line, program 8-109, 8-110, 8-111, 8-113, 8-114, 8-115, (8-116), 9-122,
(9-127), 10-134, 10-136
Loan, direct reduction 3-41, 4-60
Looping 11-147

Mantissa 1-11
[M.DY] 2-24, 2-25, (2-29)
[MEM] 8-114, (8-116)
Memory allocation 8-112, 8-114, (8-116)
Memory, Continuous 1-2
Memory, convert to program 8-113, (8-116)
Memory, program 8-108, 8-109, 8-110, 8-111, 8-112, 8-113, 8-114, 8-115,
(8-116)
Merged keycodes 9-121, (9-127)
Month, day, year format 2-24, 2-25, (2-29)

166
Mortgage 3-41
Mortgage, amortization of U4-60 - U4-64, (4-T4)
Mortgage with balloon 3-41
Multiple programs 10-137, (10-140)

Net present value 4-64 - U4-71, (4-TH)

[Nj] 4-68, L4-69, (4-T74)
Nominal rate of return U4-72
[NPV] 4-64 - L4-T71, (4-74)
Number of decimal places 2-25

[ON] 1-2
Ordinary annuity 3-41

[P/R] T7-100, 7-103, (7-104)

Past dates 2-24, 2-27, (2-29)
Pause 9-122, 9-125, (9-127)
Pausing during program execution 9-122, 9-125, (9-127)
Payment 3-35, 3-37, (3-55)
Payment mode 3-38, (3-55)
Pension fund 3-41
Percent 2-18 - 2-19, (2-29)
Percentage functions 2-18 - 2-23, (2-29)
Percent difference 2-20, (2-29)
Percent of total 2-21 - 2-23, (2-29)
[PMT] 3-35, 3-37, (3-55)
Present value 3-35, 3-37, (3-55)
[PRGM] T7-100, 7-101, 7-103, (7-104)
PRGM status indicator 7-103
[PRICE] 6-90, 6-93, (6-96)
Price of a bond 6-90, 6-93, (6-96)
Program, add instructions to 10-137, (10-140)
Program, changing a 10-136, (10-140)
Program, creating a 7-103
Program, definition of a 7-100, (7-104)
Program editing 10-134 - 10-139, (10-140)
Program, executing a 7-103, (7-104)
Program, interrupt a 9-122, (9-127)
Program line 8-109, 8-110, 8-111, 8-113, 8-114, 8-115, (8-116), 9-122,
(9-127), 10-134, 10-136
Program line 00 8-111, 9-125
Program line number 8-109

167
Program memory 8-108, 8-109, 8-110, 8-111, 8-112, 8-113, 8-114, 8-115,
(8-116)
Program memory, beginning of 8-108
Program mode 8-108, 8-111, 8-115, (8-116)
Programs, multiple 10-137 - 10-139, (10-140)
[PSE] 9-122, 9-125, (9-127)
[PV] 3'35; 3'37’ (3—55)

[R/S] T7-100, 7-103, (7-104), 9-122, 9-123, 9-125, (9-127)

[RCL] 1-8, 1-9, (1-12)
Recalling numbers 1-8, 1-9, (1-12)
[REG] 1-9, (1-12)
Registers, storage 1-8 - 1-10, (1-12)
Remaining balance U4-60, 4-61, 4-63
Remaining depreciable value 5-82
Running a program 7-103, (7-104)

Savings account 3-41

Savings plan 3-41
Shifted functions 1-10 - 1-11, (1-12)
Simple arithmetic 1-4, (1-12)
Simple interest 3-34, 3-52 - 3-54, (3-55)
Single step 8-108, 8-109, 8111, (8-116), 10-134, 10-136, (10-140)
[SL] 5-80, 5-82, (5-86)
[SOYD] 5-80, 5-82, (5-86)
[SST] 8-108, 8-109, 8-111, (8-116), 10-134, 10-136, (10-140)
Stack registers 1-8
[STO] 1-8, 1-9, (1-12)
Stopping program execution 9-122, 9-123, (9-127)
Storage registers 1-8 - 1-10, (1-12)
Storing numbers 1-8 - 1-10, (1-12)
Straight-line depreciation 5-80, 5-82, (5-86)
Sum-of-the-years-digits depreciation 5-80, 5-82, (5-86)

Time line 3-36

Time value of money 3-34 - 3-54
Two-numbered functions 1-4 - 1-6

Unconditional branching 11-146

Uneven cash flows U4-65, (4-74)

168
X

[X=0] 11-150, (11-155)

[X<Y] 11-150, (11-155)
[x<>yl 2-26, 3-54, 4-63, 5-83, 6-93
X-register 1-4, 11-150, (11-155)

Yield to maturity of a bond 6-90, 6-94 - 6-95, (6-96)

[YTM] 6-90, 6-94 - 6-95, (6-96)

(12/] 3-48, (3-55)

[12x] 3-48, (3-55)
[Aa%] 2-18, 2-20, (2-29)
[ADYS] 2-24, 2-25 - 2-27, (2-29)
[+ 1-3, 1-4
(-1 1-3, 1-4
[x] 1-3, 1-4
/7] 1-3, 1-4
[.] 1=3
[%] 2-18 - 2-20, (2-29)
[%T] 2-18, 2-21 - 2-23, (2-29)

169
 [40 HEWLETT
PACKARD

Portable Computer Division

1000 N.E. Circle Bivd., Corvallis, OR 97330, U.S.A.

00012-90022 Rev. B Printed in U.S.A. 4/84