) PACKARD

HEWLETT

CALCULATOR SUPPORT
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HP 12C SOLUTIONS

The following solutions have been developed as a continuing

effort by Hewlett-Packard to meet the needs of our customers.

TABLE OF CONTENTS

12-1 Reverse Annuity Mortgage Payment

Procedure to calculate the amount of the monthly payment

to be received from a Reverse Annuity Mortgage. A
graduated Reverse Annuity Mortgage can also be calculated
with the program provided.

12-2 Annual Percentage Rate Calculation With Fees and a Balloon

Procedure to calculate the APR of a loan when fees are

charged and a balloon payment is due at some time during
the term of the loan. This expands upon the discussion in
the owner's manual.

12-3 Biweekly Mortgage Payments and Amortization Schedule

Procedure to calculate the amount of the biweekly payment

and the loan term. A program provides a biweekly
amortization schedule.

12-4 Private Mortgage Insurance

Procedure to calculate the amount of private mortgage

insurance to be paid each period.

12-5 Adjustable Rate Mortgages

Procedure to calculate periodic payment and APR of an
adjustable (variable) rate mortgage.

12-6 Coupon Equivalent Yield

Program to calculate the coupon equivalent yield of a
discounted note (a Treasury Bill).

12-7 Duration of a Bond

Program to calculate the duration of a bond.

Page 2
HP 12S SOLUTIONS

12-8 Actuarial Calculations

Collection of programs to calculate the compound interest

functions n, i, PV, PMT, and FV using the actuarial
method. This means that the value for n can be any
positive number. The results duplicate those produced by
the HP-37E, HP-38E/C, and HP-18C calculators.

12-9 Increasing Annuities

Procedure to calculate the present and future values of an

annuity that increases at a constant rate and at equal
intervals of time. Routines are included for both END and
BEGIN mode calculations.

12-10 Annual Coupon Bond Price and Yield

Program to calculate the price, accrued interest, and

yield of an annual coupon bond. The redemptlon can be at
maturity or at call, and either calendar basis can be
accommodated (30/360 or Actual/Actual).

12-11 Deposits Needed to Meet a Future Cash Flow Need

Procedure to calculate the amount of money to deposit each

period to accumulate a desired amount. A typical example
1s "How much should I save each month to fund my
daughter's college education?"

12-12 Price and Yield to Call (Actual/Actual Day Basis)

Program to calculate price and yield to call, assuming a

seml-annual coupon payment and an Actual/Actual day basis.

Hewlett-Packard supglles the procedures herein without warranty

and will not be liable for damages arising from their use.
2} orlkano
HP-12C Solutions 12-1
Reverse Annuity Mortgage Payment

Reverse Annuity Mortgage

A reverse annuity mortgage allows people over 62 years of age to use the equity they have in their
homes to generate regular monthly income. The following procedure determines the amount of the
monthly payment that thev will receive.

1. Press (9] (BEG] and [f] [FIN].

2. Kev in the number of vears in the loan and press [g] [12x].
3. Kevin the annual interest rate (as a percentage) and press (9] [(12+].
4. Kev in the amount of the initial cash flow (if it exists) and press [(PV].
5. Kev in the total loan amount and press (Fv].
6. Press to calculate the monthly payment.

Example.
Loan amount = $64000
Term = 5 vears
Interest rate = 13%
Initial payment = $2500

Keys: Display: Description:

(9] (BEG Selects Begin mode.

FIN] Clears finance registers.
5 (9] €0.00 Stores known values.
13 (9] (2= 1.08
2500 [PV] 2,500, 00
64000 [CHS) [FV] -64,000.00
PMT £98.41 Calculates monthly payment received.

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Graduated Reverse Annuity Mortgage

A graduated reverse annuity mortgage means that the monthly payments are less in the beginning,
and increase at a specified rate for the term of the loan. A program to calculate the monthly pavments
follows. Kev in the program, then use this procedure.

1. Kev in the number of years in the loan and press 0.

2. Key in the annual interest rate (as a percentage) and press 1.
3. Key in the total loan amount and press 2.
4. Key in the annual percentage increase in the payment and press 3.
S. Keyin the amountof the initial cash flow and press 4. If there is no initial cash flow, keyin
0.
6. Press to calculate the payment received in the first year.
7I Repeat step 6 to calculate the payment for subsequent years.
8. Optional: Press 5 to display the loan factor. Press 6 to display the initial cash flow
factor.
For a newloan, return to step 1 and key in any values that have changed.

Example.
Loan amount = $64000
Term = 5 years
Interest rate = 13%
Initial payment = $2500
Increase in payment = 6%

If you have not keyed in the program, do it now.

Keys: Display: Description:

5 0 S.00 Stores known values.

13 1 13,08
64000 (sT0] 2 64,000, 00
6 3 6,00
2500 [ST0) 4 2,500,080
R/S €28.85 Calculates pavment in year 1.
R/S 666.58 Calculates payment in year 2.
786 .58 Calculates payment in year 3.
748,97 Calculates payment in year 4.
R/S 792.91 Calculates payment in year 5.
Graduated Reverse Annuity Mortgage Payment Program.

Keys Display Keys Display Keys Display

0 28- 45 O 57- 15
(PRGM] 00- (sT0] 7 29- 44 7 (sT0] 6 58- 44 6
) [FIN] 01- 42 34 (n] 30- 11 59.- 20
(9] 02- 43 8 31.- 15 2 60- 45 2
1 03- 32- 44 14 61- 40
3 04- 45 3 9] 33- 43 7 (9)(GTO] 64 62-43,33 64
% 05- 25 1 34- 45 1 2 63- 45
06- 40 (9] 35- 43 12 5 64- 45
(RCL] 1 07- 45 1 1 36- 1 ) 65- 20
1 08- 1 (9] (12x] 37- 43 11 R/S 66- 31
2 09- 2 0 38- 0 1 67-
0 10- 0 39. 15 (-]0 68-44 30 O
0 11- 0 (PV] 40- 13 0 69- 45 O
=) 12. 10 (RCL] O 41- 45 O (9] (x=0] 70- 43 35
1 13. 1 (9] (2] 42- 43 11 (9] 79 71-43,33 79
(+] 14- 40 0 43- o 72. 33
1 15. (PMT] 44. 14 73- 33
2 16- 2 (FV] 45. 15 3 74- 45 3
] 17- 21 1/x] 46- 22 % 75- 25
B 18- 10 (s10] 5 47- 44 5 76- 40
1 19- 1 (RCL] 4 48- 45 R/S 77- 31
=] 20- 30 (9] [x=0] 49- 43 35 (9] 67 78-43,33 67
(EEX] 21- 26 (9](GTO]63 50-43,33 63 (RCL] 7 79- 45
2 22. 2 (RCL] O 51- 45 0 0 80- 44
] 23- 20 (9] (12x] 52- 43 11 CLX 81- 35
B 24. 12 1 53- 45 1 (9]J(GTO]00 82-43,33 00
1 25. 1 FHEE 54- 43 12
(CHS] 26- 16 1 55. 1
PMT 27- 14 56- 13

Registers
n: used i: used PV: used PMT: used

FV: used Rqg: # years R4: % interest R,: loan amount

Rj3: % increase Ry init CF Rsg: loan factor Rg: CF factor
R-: used

(b] HEWLETT
2B pACKARD
Portable Computer Division
1000 N.E. Circle Bhvd
Corvallis. OR 97330
(D) Jvtrall
HP-12C Solutions 122
Annual Percentage Rate Calculation With Fees and a Balloon
This procedure calculates the APR of a loan when fees are charged (either as a percentage of the loan
amount or as a flat rate) and a balloon payment is due at some time during the term of the loan.
Remember to use the cash flow sign convention (money received is positive, money paid out is
negative).

User Instructions.

1. Set End mode ([g](END]) and clear the financial registers ([fJ(FIN]).
2. Calculate the periodic payment amount of the loan.
® Key in the total number of pavment periods; press [n].
B Key in the periodic interest rate; press [i].
® Key in the mortgage amount; press [PV].
B Press to calculate the periodic payment amount.
3. Calculate the amount of the balloon payment.
® Key in the number of the payment period where the balloon payment occurs; press [n].
® Press to calculate the balloon payment amount.
4. Calculate the actual net amount disbursed.
B If the fees are stated as a percentage of the mortgage amount (points), recall the mortgage
amount ([RCL] [PV]); key in the fee percentage rate; press (=] [pv].
B If the fees are stated as a flat charge, recall the mortgage amount ([RCL][PV]); kevin the fee
amount (flat charge); press (-] [PV].
B If the fees are stated as a percentage of the mortgage amount plus a flat charge, recall the
mortgage amount ([RCL] [(PV]); keyin the fee percentage rate; press (=), kev in the fee
amount (flat charge) and press (-] [(PV].
5. Press [i] to calculate the percentage rate per compounding period.
6. To calculate the annual nominal percentage rate, key in the number of periods per year and press
-

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Example. A 30-vear, $50000 loan at 15% interst has fees of 2 points plus $150. Assuming that
monthly payments are made and that the loan is paid in full at the end of the seventh year, what is
the APR?

Keys: Display: Description:

[S)(END] Sets End mode.

Clears the financial registers.
30 [g](12x] 360 .00 Stores number of months.
15 [9)(12¢] 1.25 Stores monthly interest rate.
50000 506,000, 6o Stores loan amount.
PMT -632.22 Calculates monthly payment amount.
7 (9](12x] 84,00 Stores number of payments until
balloon.
-48,937, 43 Calculates balloon payment.

2 [%]J[=] 150 Subtracts fees from original loan

Y] 48,850, 6o amount and restores adjusted amount.
() 1.30 Calculates monthly interest rate.
12 15.54 Calculates annual percentage rate.

(b] HEWLETT
/B pACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-2
11/86
2] Sicknno
HP-12C Solutions 123
Biweekly Mortgage Payments and Amortization Schedule
One wayto pay off your mortgage faster is to make biweekly mortgage pavments. Instead of paving
once a month, you make one-half of the monthly payment every two weeks. You make 26 or 27
payments each year (depending on the payment date), increase your equity, and pay less interest.

Example 1. Part 1. On a $75,000, 30-year mortgage at 13.5% interest, what is the amount of the
biweekly pavment?

Keys: Display: Description:

(9](END] Sets End mode.

[t](FIN] Clears the financial registers.
75000 75,000.00 Stores loan amount.
30 (9](12x] 360.00 Stores number of months.
13.5 [(9])(12+] 1.13 Stores monthly interest rate.
PMT -859.0¢ Calculates monthly payment amount.
2 [+])[(PMT] -429.53 Calculates and stores biweekly pavment
amount.

Part 2. With this biweekly pavment, how long will it take to pay off the mortgage?

13.5 26 (+](1] .52 Calculates and stores biweekly interest

rate.
458 .00 Calculates total number of payments.
26 [+] 17 .62 Calculates number of years.

Part 3. What is the remaining balance after 26 payments have been made?

26 -73,886.65 Calculates balance after 26 payments.

Part 4. If 27 payments are made the first year, how much interest is paid? What is the remaining
balance?

0 8.00 Clears n register.

27 [f]J(AMORT -10,438.087 Interest paid in first year.
73,840.76 Remaining balance.

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Biweekly Amortization Schedule Program

The following program provides a biweekly amortization schedule, displaying the date of the pav-
ment, the amounts of interest and principal, and the remaining balance.

Keys: Display: Keys Display Keys Display

15- 11 1 31- 1
00- 0 16- 45 0 32- 42 11
(JFIN] 01- 42 34 ||2 17- R/S 33- 31
0 02- 45 O ||6 18- 6 Dyl 34. 34
(9)(r2%) 03- 43 12 19- 10 (R/S 3s- 31
1 04- 45 1 ||[) 20- 12 0 36- 0
05.- 13 1 21. 1 37- 45 13
2 06- 45 2 4 22- 44 4 (9] 38- 43 34
(g](12x] 07- 43 11 3 23- 45 3 (gJ(cT0) 00 39-43,33 00
PMT 08- 14 1 24 1 R/S 40- 31
(t]J(RND] 09- 42 14 4 25. 4 (|1 41.- 1
2 10- 2 (9)(DATE] 26- 43 16 4 42-44 40 4
+) 11- 10 3 27- 44 3 (g)(GT0] 23 43-43,33 23
(PMT] 12. 14 6 28- 42 6 [f)[P/R]
R/S) 13- 31 R/S 29- 31
0 14- 0 2 30- 42 2

User Instructions.

1. Keyin the program.

2. Keyin the annual interest rate as a percent and press 0.
3. Keyin the loan amount and press 1.
4. Key in the original term in years and press 2.
5. Keyin the origination date (in month, day, year format) and press 3.
6. Press to display the amount of the biweekly payment.
7. Press [(R/S] to display the date of the first payment.
8. Press to display the interest portion of the payment.
9. Press to display the principal portion of the payment.
10. Press to display the remaining balance.
11. Press to display the date of the next payment.
12. Return to step 8 to display the interest, principal, and remaining balance for subsequent
payments.
Example 2. Generate an amortization schedule for a $60,000, 30-vear, 14% mortgage, paid biweekly,
that originates November 12, 1984.

Keys: Display: Description:

14 0 14,00 Stores interest rate.

60000 [sT0] 1 €6 ,000 .00 Stores loan amount.
30 2 30,080 Stores number of years.
11.121984 [ST0] 3 11.12 Stores origination date.
R/S -355.4¢ Calculates biweekly payment amount.
R/S 11,26,1984 1 Date of first payment briefly displaved.
11.261984 The 1 indicates a Monday.
R/S -323.088 Amount of interest.
-32.38 Amount of principal.
598,967 .62 Remaining balance.
12,10,1984 1 Date of next pavment.
12.161984

R/S -322.9a Amount of interest.

R/S; _32156 Amount of principal.
R/S | 59,835.0¢6 Remaining balance.
R/S 12,24,1984 1 Date of next payment.
12.241984

[fi] HEWLETT
B PACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-3
12/86
72} Sickanmo
HP-12C Solutions 124
Private Mortgage Insurance
Private mortgage insurance (PMI) is usually calculated based on a.percentage of the outstanding loan
balance. Since the loan balance changes, the PMI calculation is done once each year.

User Instructions.

1. For vear 1:
B Kev in the loan amount and press (ENTER].
B Key in the insurance rate as a percentage and press [%].
B Key in the number of payments per year and press [+].
2, For subsequent years:
B Calculate the balance at the end of the previous year.
B Key in the insurance rate as a percentage and press [(%].
® Key in the number of payments per vear and press [+].

Example. A 30-vear, $75000 loan at 15% interest has private mortgage insurance of .25% of the loan
balance. Calculate the monthly private mortgage insurance (PMI) payment for year 1.

Keys: Display: Description:

75000 [ENTER 75,000, 00 Enters loan amount.

.25 187 .50 Calculates year 1 PMI payment.
12 [+] 15.63 Calculates monthly PMI payment for
year 1.

Calculate the monthly PMI for year 2:

H)FIN] Clears the financial registers. (The dis-

play does not change.)
30 (g)(12x] 360.00 Stores total number of payments.
15 [(9)(12¢] 1.25 Stores monthly interest rate.
75000 -75,000.00 Stores loan amount.
PMT 948,33 Calculates monthly mortgage pavment.
1 [9])(12x] 74,860.68 Balance at the end of the first vear.
.25 (%] 187 .15 Calculates year 2 PMI payment.
12 (+] 15.60 Calculates monthly PMI payment for
year 2.

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Calculate the monthly PMI payment for year 3.

2 (9)72x) 74,698.97 Balance at the end of the second vear.

25 [%] 186.75 Calculates vear 3 PMI payment.
12 (5] 15.56 Calculates monthly PMI payment for
year 3.

Calculate the monthly PMI pavment for vear 30.

29 [9)(12x] [FV] 19,506 .88 Balance at the end of vear 29.

25 (%) 26.27 Calculates year 30 PMI payment.
12 (3] 2.19 Calculates monthly PMI pavment for
year 30.

Total PMI Program

The total PMI paid over a specified number of years is computed with the following program.

Keys: Display: Keys: Display: Keys: Display:

2 08- 44 2 1 17- 1
(f][PRGM] 00- (9)12x] 09- 43 11 [-] 18- 30
PMT 01- 14 10- 15 (RCL] 2 19- 45 2
(rcL] [n] 02- 45 11 [RCL]3 11- 45 3 [9)xsy] 20- 43 34
1 03- 1 % 12- 25 (9)(GTO 09 21-43,33 09
2 04. 2 0 13-44 40 O 0 22- 45 0
(<) 05. 10 1 14- 1 [9)(GTO] 00 23-43,33 00
1 06- 44 1 2 1544 40 2 [H)P/R]
1 07- 1 1 16- 45 1

User Instructions.

1. Keyin the program.

2, Press [fJ[REG] to clear all registers.
3. Keyin the insurance rate as a percentage and press 3.
4. Keyin the loan amount and press (PV].
5. Keyv in the total number of years and press [g](12x].
6. Key in the annual interest rate as a percentage and press [9](12+].
7. Press to compute the total PMIL
Example 2. Using the information in example 1, calculate the total PMI.

Keys: Display: Description:

[1)(REG] Clears all registers.

.25 3 8.25 Stores insurance rate.
75000 (cHS] [PV] 75,000.00 Stores loan amount.
30 (9](12x] 360,00 Stores total number of payments.
15 [9)(12%] 1,25 Stores monthly interest rate.
R/S 4,336.12 Calculates total PMI.

[fi] HEWLETT
Y8 PACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-4
12/86
U2 -ickaro
HP-12C Solutions 125
Adjustable Rate Mortgages
An adjustable rate mortgage is a mortgage loan that provides for the adjustment ofits interest rate as
market interest rates change. As the interest rate changes, the amount of the periodic pavment changes
to reflect the new interest rate. Given the terms of the original mortgage, the changes in the interest
rate, and the time frame in which the changes occur, this procedure calculates the amount of each
periodic pavment. Once each payment is known, the APR of the entire transaction can be calculated.

User Instructions.

1. Calculate the amount of the initial periodic payment.

2. Calculate the loan balance just before payments increase the first time, change the sign, and store
the result in [PV].
3. Change the interest rate, adjust the term, store 0 in [FV], and recalculate the periodic payment.
4. Calculate the loan balance before payments increase the next time, change the sign, and store the
result in [PV].
5. Repeat steps 3 and 4 until all payments are calculated.
6. Once the pavments are determined, use [f]J(IRR] to calculate the APR.

Example 1. A $50,000, 30-year, adjustable rate mortgage has the following terms:

12% interest in first year

13% interest in second and third years
15% interest for the remaining term

What are the monthly payments?

Keys: Display: Description:

(HFIN] Clears the financial registers.

(9)(END] _ Sets End mode.
30 [g)(12x] 360 .00 Stores number of months.
12 [9)(12+] 1.00 Stores initial monthly interest rate.
50000 -50,000.00 Stores loan amount.
PMT 514.31 Calculates monthly pavment amount.
12 23 -49,818.5¢ Calculates and stores balance at end of
first year.
29 (9)(12x] 345 .00 Stores remaining number of pavments.
13 (g)(72+] 1.08 Stores new monthly interest rate.

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Keys: Display: Description:

0 (FV] 0.00 Sets future value to zero.

PMT 552.70 Calculates payment amount in years
two and three.
24 PV -49,464 .37 Calculates and stores balance at end of
third year.
27 [9)(32x 324 .001.250.00 Stores remaining number of pavments
15 (9)(12= and newinterest rate.
0
PMT 629.55 Calculates final payment amount.

Example 2. Calculate the APR, given the above payments.

Keys: Display: Description:

(f)(REG 0.00 Clears all registers.

50000 (CcHS] (9](CFo] -50,000 .00 Stores initial cash flow.
514.31 [@)(CF) 12 [O)N) Stores subsequent cash flows. (Each
552.70 [8)[CFy) 24 [§)(N) group can have a maximum of 99 cash
629.55 [3)[CF) 99 (TN flows.)
(9)(cF]) 99 [g](N]
(9]CcF]) 99 [9)(N]
[(8)Ccr] 27 [9)N]
(D0RR] 12 [x] 14,13 Calculates the APR.

Example 3. If the previous mortgage has a balloon paymentin eight years, as well as a 2 point fee,
what is the APR?

Step 1. First, calculate the balance due (the balloon payment) at the end of eight years.

Keys: Display: Description:

Clears the financial registers.

49464.37 -49,4¢64,37 Store the mortgage data at the begin-
15 (912« 1.25 ning of year 4.
629.55 629.55
5 [9)(x2x] (FV] 48,468, 32 Balance at the end of eight vears.

Step 2. Calculate the APR.

.00 Clears all registers.

50000 [CHS) (ENTER] 2 (%) (5] -49,008.00 Stores initial cash flow.
(9](CFo]
514.31 [Q)(TE) 12 @) Stores monthly cash flows.
552.70 [G)(CR) 24 Q)N
629.55 [8)(CF) 59 (8N
629.55 48468.32 49,0897 .87 Stores final cash flow.
(9JCcF]
(1)0RR] 12 [X] 14.20 Calculates the APR.
Example 4. In the previous example, how much interest is paid in years 1, 2, 3 and 4?

Keys: Display: Description:

FIN Clears the financial registers.

50000 -50,000,00 Stores first year loan data.
12 (9)(12¢] 1.00
514.31 [PMT 514,31

12 [t][AMORT 5,990.23 Interest paid in year 1.

13 (9)(12+ 1.08 Stores second and third vear data.
552.70 552.78

12 6,466.76 Interest paid in year 2.

12 6,443.90 Interest paid in year 3.
15 [(g)(2+] 1.25 Stores final loan data.
629.55 PMT €29 .55

12 7,409, 9¢ Interest paid in year 4.

(b] HEWLETT
2B PACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-5
1/87
2] Sickano
HP-12C Solutions 126
Coupon Equivalent Yield
The coupon equivalent vield is a way of determining which of two investments of similar maturity will
provide a higher return—a non-interest bearing obligation purchased at a discount (a TreasuryBill) or
a semi-annual coupon bond on a 365-day basis (a government bond).

Program.

Keys Display Keys Display Keys Display

0 22. 0 (RCL] 5 45- 45 5

00- 23. 10 =) 46- 30
0 01- 45 O 4 24- 44 4 4 47- 45 4
1 02- 45 1 2 25- 2 2 48- 2
(9)(aDYS] 03- 43 26 (x] 26- 20 x) 49- 20
3 04- 44 3 2 27- 45 2 50- 10
1 05.- 1 28- 40 (¢)(GTO] 64 51-43,33 64
8 06- 8 5 29- 44 5 EEX 52- 26
2 07- 2 30- 36 2 53- 2
[xxy] 08- 34 31. 20 2 54. 45
(9)(x<y] 09- 43 34 2 32- 45 2 ) 55. 10
(9](cT0] 52 10-43,33 52 2 33- 2 1 56-
3 11- 45 3 34. 20 = 57- 30
2 12. 2 2 3s. 2 3 58- 3
x] 13- 20 0 36- 0 6 59.
3 14. 3 0 37- 0 5 60- 5
6 15- =] 38- 30 x] 61- 20
5 16- 5 4 39.- 4 3 62- 45 3
=] 17- 30 ] 40- 20 63- 10
2 18- 45 2 4 41- 45 4 64- 26
19- 20 x] 42. 20 2 65- 2
7 20- 7 =) 43- 30 x] 66- 20
3 21. (9] 44. 43 21

Registers:

n: Unused i Unused PV: Unused PMT: Unused

FV: Unused Ro: Settlement R4: Maturity R,: Price
R3: #days R4 Used Rs: Used Rg-R ¢ Unused

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
User Instructions.

1. Key in the program.

2. Keyin the settlement date and press 0.
3. Keyin the maturity date and press 1.
4. Key in the purchase price and press 2.
5. Press to calculate the coupon equivalent yield (as a percent).

Example. What is the coupon equivalent vield of a bond with a settlement date of Julv 13, 1984, a
maturity date of May 1, 1985, and price of $96.78?

Keys: Display: Description:

(REG] 0.00 Clears all registers.

7.131984 0 7.13 Stores settlement date.
5.011985 [STO] 1 S.081 Stores maturity date.
96.78 (ST0] 2 96.78 Stores bond price.
R/S 4.13 Calculates coupon equivalent vield.

Formulas.

B For <182 davs

- <1qo _]>x 365

Price n

® For >182 davs

P = —b + \ h?2—4ac
2a

Where:

2 (Price) (n) - (Price) (365)

730
b = 2a+Price
¢ = 2 (Price)—200
n = actual number of days
1 = coupon equivalent yield (decimal)

(fi] HEWLETT
2B pACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-6
2/87
A cadiaro
HP-12C Solutions 12-7
Duration of a Bond
The duration of a bond is the average time that elapses until the various cash flows (coupons and
redemption value) are received. In other words, the duration is a weighted average of the number of
periods until the payments occur. For coupon-bearing bonds, the duration is always shorter than the
term to maturity. (For zero-coupon bonds, duration is equal to maturity.)

Program.

Keys Display Keys Display Keys Display

(1)[P/R] 1 14- 45 1 28- 45 14

[tJ(PRGM] 00- = 15- 30 x) 29- 20
23 01- 13 0 16- 45 O 30- 45 15
0J 02- 45 12 (RcL](n] 17- 45 11 31- 45 11
(EEX] 03- 26 18- 20 ] 32. 20
2 04- 2 =) 19- 30 (RCL]1 33- 45 1
=) 05- 10 (RCL]1 20- 45 1 34- 45 11
0 06- 44 O 21- 45 11 ] 35- 21
1 07- 1 ] 22. 21 36- 10
08- 40 (+] 23. 10 37- 40
Bl 09- 44 1 [(RCLJO 24- 45 O 38- 45 13
10- 45 11 25. 36 CHS 39- 16
1 11- 1 26- 20 (+] 40- 10
12- 40 (+] 27- 10
"] 13- 21

Registers:

n: # coupons i: Yield PV: Used PMT: Coupon amount

FV: Redemption Ro: Yield/100 R;: Yield/100 + 1 R,-R4: Unused

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
User Instructions.

= Keyin the program and set End mode.

Kev in the total number of coupons and press [n].
N

Key in the dollar amount of each periodic coupon and press [PMT .
WO

Key in the periodic vield to maturity as a percent and press [i].

S

5. Key in the redemption value and press (FV].

6. Press to calculate the number of periods in the duration.
7. For a newcase, return to step 2.

Example. Calculate the duration of the following bond: $60 coupon, paid semi-annually for 5 years,
13.13% annual yield, $1000 redemption value.

Keys: Display: Description:

(9](END] Sets End mode.

5 (ENTER] 2 (x][n] 16,00 Stores total number of coupons.
60 €0 .00 Stores amount of each periodic coupon.
13.13 [ENTER] 2 (+](1] 6.57 Stores semi-annual yield.
1000 1,000 00 Stores redemption value.
R/S] 7.7S Calculates duration in semi-annual
periods.
2 [3) 3.8 Duration in vears.
-J

Reference: Jess H. Chua, A Closed-Form Formula for Calculating Bond Duration, Financial Analvsts
Journal, Mav-June 1984.

[fi/” HEWLETT
PACKARD

Portable Computer Division

1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-7
2/87
A cackaro
HP-12C Solutions 12-8
Actuarial Calculations
This collection of programs calculates the compound interest functions 1, i, PV, PMT, and FV using the
actuarial method. This means that the value for # can be anypositive number.* The results duplicate
those produced by the HP-37E, HP-38E/C, and HP-18C calculators.

The first program calculates n, PV, PMT, or FV. The second program, a shorter version of the first
program, onlv calculates n. The third program calculates i.

Program to Calculate n, PV, PMT, FV.

Keys Display Keys Display Keys Display

1P/R) 3 22- 44 3 45- 44 15

[t][PRGM] 00- (=] 23- 30 (9)(cTO] 00 46-43,33 00
(sTO] 4 01- 44 4 (RCL] 2 24. 45 47- 45 15
1 02- 1 B 25. 10 3 48- 45 3
(RcL] (1] 03- 45 12 4 26- 44 49- 20
(%] 04- 25 5 27- 45 5 50- 45 13
2 05- 44 2 28- 20 51- 40
06- 40 6 29- 44 6 (RCL] 4 52. 45
1 07- 44 X% 30- 34 53- 10
0 08- 45 O 2 31. 2 1 54. 45
] 09- 21 X% 32. 34 0 55- 45 O
(PMT] 10- 45 14 (9])(x<y] 33- 43 34 y*] 56- 21
11- 20 (9)(GTO) 61 34-43,33 61 (] 57- 10
5 12- 44 5 3 35.- 3 CHS 58- 16
1 13- X% 36- 34 59- 44 14
4 14- 45 4 (9)(x<y) 37- 43 34 (gJ(GTO] 00 60-43,33 00
(9)x<y] 15- 43 34 (9)(GTO] 47 38-43,33 47 61- 45 15
(9)(GTO) 69 16-43,33 69 6 39- 45 6 3 62- 45 3
Xz 17- 34 40- 45 13 x] 63 20
(RCL] 1 18- 45 1 41- 40 6 64- 45 6
19- 45 11 3 42- 45 3 65- 40
CHS 20- 16 (+] 43- 10 CHS 66- 16
y*] 21- 21 CHS 44- 16 67- 44 13

* Calculations using a non-integer value for n produce a mathematically correct result, but this result has no simple useful interpretation

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
 Keys Display Keys Display Keys Display

(g](GTO] 00 68-43,33 00 5 74- 45 5 (9](LN 80- 43 23

5 69- 45 5 75- 45 13 [RCL] 1 81- 45 1
(RCLJ[FV] 70- 45 15 RCL] 2 76- 45 2 (9][LN 82- 43 23
(RCL] 2 71- 45 2 77- 20 (] 83- 10
x] 72. 20 78- 40 84- 44 11
= 73- 30 B 79- 10 (t](P/R]

Registers:

n: Used i Used PV: Used PMT: Used

FV: Used Ro: 0 or 1 Ry 1+ i Ro: i
R3: Used R4 Used Rg: Used Re: Used
R;: Unused

User Instructions for n, PV, PMT, FV Program.

1. Kev in the n, PV, PMT, FV program.

2. Press [{](FIN].
3. Store 0 in register 0 for End mode; store 1 in register 0 for Begin mode.
4. Kev in the periodic interest rate; press 0]

5. Keyin any three of the following variables. Use the cash flow sign convention (moneyreceived is
positive; money paid is negative).
B Kev in the total number of periods; press [n].
® Kev in the present value; press [PV].
B Kev in the periodic pavment; press [PMT].
® Kev in the future value; press [(Fv].
. To calculate n, press 1 [R/S].
O

To calculate PV, press 2 (R/S].

N

. To calculate PMT, press 3 (R/S].

0

. To calculate FV, press 4 [R/S].

O

1 . For subsequent problems, return to step 2 and change values as needed.

o

Example. A $1000 loan has monthly payments of $80. If the annual interest rate is 9%, how manv
pavments are necessary to amortize the loan? The payments are made at the end of each period.

Kev in the n, PV, PMT, FV program.

Keys: Display: Description:

BE Clears finance registers.

0(sT01!0 @.ed Sets End mode.
1000 [CHS [PV] -1060 .80 Stores known values.
0 (@)Tz] @.75
80 [PT) €e.ao
0 (7] 6. a0
1 R/S | 12.17 Calculates number of monthly
payments.
Program to Calculate n.

Keys Display Keys Display Keys Display

(1P7/R] (RCL) 09- 45 14 3 19- 45 3

(1)(PRGM] 00- 10- 20 20- 40
1 01.- 1 11- 44 3 (+] 21. 10
(RCL] (1 02- 45 12 12- 45 15 [(9)(LN] 22- 43 23
(%) 03- 25 2 13- 45 2 1 23- 45 1
(s10] 2 04- 44 2 14- 20 [9)(tN] 24- 43 23
05- 40 = 15- 30 (+] 25.- 10
1 06- 44 1 16- 45 13 26- 44 11
0 07- 45 O 2 17- 45 2 tJ(P/R]
) 08- 21 18- 20

Registers:

n: Used i: Used PV: Used PMT: Used

FV: Used Ro: 0 or 1 Ry 1+ i Ry i
R3: Used Rs-R 4 Unused

User Instructions for n Program.

Kev in the n program.

PN

Press [t][FIN].
Store 0 in register 0 for End mode; store 1 in register 0 for Begin mode.
Kev in the periodic interest rate; press [ij.
Kev in two or three of the following variables. Use the cash flow sign convention (monev
received is positive; money paid is negative).
B Key in the present value; press [PV].
B Kev in the periodic pavment; press [PMT].
B Kev in the future value; press [FV].
6. Press to calculate 1, the total number of periods.
7. For subsequent problems, return to step 2 and change values as needed.

Example. You deposit $150.00 each month in an account paying 6%2%, compounded monthlv. How
long will it take to accumulate $20,000.00? Assume End mode.

Key in the n program.

Keys: Display: Description:

FIN] Clears finance registers.

0(s10J0 @.66 Sets a End mode.
150 (CHS [PMT] -15@. 64 Stores known values.
6.5 (9)(12+ 8.54
20000 (FV) 26,000, 00
R/S] [email protected] Calculates number of monthlv
payments.
Program to Calculate i.

Keys Display Keys Display Keys Display

(t)[P/R] (RCL] 23- 45 14 47- 45 15

(t](PRGM 00- 24. 20 (RCL] 4 48- 45 4
] 01.- 48 25- 45 13 49- 20
0 02- o (+] 26- 40 = 50- 30
1 03- 1 (RCL] 27- 45 15 =) 51- 10
(s10] 3 04- 44 3 2 28- 45 2 (-]3 52-44 30 3
1 05- 1 29. 20 53- 36
(RCL] 3 06- 45 3 30- 40 (CHS] 54. 16
1 07- 1 2 31- 45 2 (9)(x<y] 55- 43 34
(+] 08- 40 (RCL] 1 32- 45 1 xzy | 56- 34
1 09- 44 (] 33- 10 EEX 57- 26
(RCL] 10- 45 11 (n] 34- 45 11 CHS 58- 16
CHS 11- 16 (x] 35- 20 8 59. 8
y*] 12- 21 (sTO] 4 36- 44 4 9)x<y) 60- 43 34
2 13- 44 2 1 37- (9][GTO] 05 61-43,33 05
=) 14. 30 (RCL] 2 38- 45 2 3 62- 45 3
(RCL] 3 15- 45 3 B 39- 30 EEX 63- 26
(+] 16- 10 (RCL] 3 40- 45 3 2 64. 2
(RCL] 3 17- 45 (] 41- 10 x] 65- 20
(RCL] O 18- 45 =] 42. 30 (ENTER 66- 36
x] 19- 20 (RCLI[PMT] 43- 45 14 s10] [/ 67- 44 12
1 20- 1 (RCL] 3 44- 45 3 (f){P/R]
(+] 21. 40 B 45. 10
(] 22. 20 x] 46- 20

Registers:

n: Used ir Used PV:. Used PMT: Used

FV: Used Rg: 0 or 1 Ry: 1+ i Ro: (1+ /)"
Rg3: / guess R4: Used Rg-Rq: Unused

User Instructions for i Program.

1. Key in the 1 program.

2. Press [f][FIN].
3. Store 0 in register 0 for End mode; store 1 in register 0 for Begin mode.
4. Key in three or four of the following variables. Use the cash flow sign convention (monev
received is positive; moneyv paid is negative).
B Keyin the total number of periods; press [n].
® Key in the present value; press [PV].
B Keyv in the periodic pavment; press [PMT].
B Key in the future value; press [Fv].
S. Press [R/S] to calculate the periodic interest rate.
6. For subsequent problems, return to step 2 and change values as needed.
Example. You currently have $1000 in a savings account. If you wish to double your money in 5'-
vears, what annual interest rate do vou need to earn?

Kev in the i program.

Keys: Display: Description:

FIN] Clears finance registers.

0 0 8. a8 Sets End mode
1000 PV -1@00, 60 Stores known values.
2000 Fv cean, a0
5.5 S, S@
0 [PMT | 8. 8a

R/S 13.432 Calculates annual interest rate.

[fi] HEWLETT
2B pACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330

12-8
4/87
K HEWLETT
PACKARD

HP-12C Solutions 12-9

Increasing Annuities
The following routines can be used to calculate the present and future values of an annuity that
increases at a constant rate at equal intervals of time. Routines are included for both END and BEGIN
mode calculations.

Present Value of an Increasing Annuity (END Mode).

Press and [g][END].

Kev in the total number of payment periods and press [n].
Key in the pavment percentage increase per period expressed as one plus the decimal interest rate
and press (ENTER]. (If there is a percentage decrease, keyit in as one minus the decimal interest
rate.)
Key in the discount (interest) rate per period expressed as one plus the decimal interest rate and
press [
Kev in the amount of the starting payment and press (+]) (PMT].
Press [PV] to calculate the present value of the payvment stream.

Present Value of an Increasing Annuity (BEGIN Mode).

1- Press and [g](END].

Kev in the total number of pavment periods and press [n].
Kev in the discount (interest) rate per period expressed as one plus the decimal interest rate and
press (ENTER .
Key in the pavment percentage increase per period expressed as one plus the decimal interest rate
and press ().
Keyin the amount of the starting payment and press [PMT].
Press to calculate the present value of the payment stream.

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Future Value of an Increasing Annuity (END Mode).

Press (f]{FIN] and [g](END].

Kev in the total number of pavment periods and press [n].
Key in the pavment percentage increase per period expressed as one plus the decimal interest rate
and press [(ENTER]. (If there is a percentage decrease, keyit in as one minus the decimal interest
rate.)
Keyin the discount (interest) rate per period expressed as one plus the decimal interest rate and
press (2% [1].
Keyin the amount of the starting payment and press (+] [P™T].
Press 0 [P™mT].
Key in the discount (interest) rate as a percentage and press [i].
Press to calculate the future value of the payment stream.

Future Value of an Increasing Annuity (BEGIN Mode).

1. Press [f][FIN] and [g](END].

2l Key in the total number of payment periods and press [n].
3. Keyin the discount (interest) rate per period expressed as one plus the decimal interest rate and
press (ENTER).
4' Kev in the pavment percentage increase per period expressed as one plus the decimal interest rate
and press ).
5. Kev in the amount of the starting payment and press (PMT].
6. Press 0 [eMT].
7. Keyv in the periodic discount (interest) rate as a percentage and press [i].
8. Press to calculate the future value of the payment stream.

Example 1. You are appraising a piece of income propertythat is providing increasing rents. Assum-
ing a 7% rate of increase over the next 5 years, what is the present value of the income stream? Your
discount rate is 12%, rent for the first year is expected to be $8,500, and payments occur at the end of
the vear.

Keys: Display: Description:

FIN] (g])(END

5
1.07 (ENTER]
112 [a%] [
8500 [xay] [+] [PMT]
-34,706 .26 Calculates present value.
Example 2. Todav vou deposit $1000 into a savings account that earns 9 V2 interest, compounded
annually. Each vear vou plan to increase the amount of your deposit by 15%. How much will vou
accumulate in 20 vears?

Keys: Display: Description:

[OEN] (gJ(eno]
20 [n]
1.095 (ENTER]
1.15 0J
1000

0
9.5 (i) (FV] Calculates future value.
r
<
)

on

-~J
T
0

(fi] HEWLETT
/0 PACKARD

Portable Computer Division

1000 N.E. Circle Blvd.
Corvallis, OR 97330

12-9
3/87
A cackaro
HP-12C Solutions 12-10
Annual Coupon Bond Price and Yield
This program calculates the price, accrued interest, and vield of an annual coupon bond. The bond can
be either a short or long-term bond. Redemption can be at maturity or at call, the price is quoted as a
percentage, and the calendar basis is Actual/Actual. For annual coupon bonds quoted on a 30/360
daybasis, insert [(R+] after (9J(aDYS] at step 2, and change program lines 15, 30, 36, and 49 to the
following:

Keys Display

(9J{GTO] 48 15-43,33 48
(9J(G10] 38 30-43,33 38
(gJ(c10] 67 36-43,33 67
(9)(GTO] 70 49-43,33 70

Program.

Keys Display Keys Display Keys Display

(RCL] 2 16- 45 2 CHS ] 33- 16

fJ(PRGM] 0O- PMT 17- 14 7 33- 45 7
(9](BEG] 01- 43 7 2 18- 45 (=) 35- 30
(9)(aDYS] 02- 43 26 4 19- 45 (9)(cTO] 66 36-43,33 66
(RCL] 5 03- 45 5 20- 40 37- 45 14
(] 04- 10 FV | 21. 15 7 38- 45 7
(sT0] 6 05- 44 6 3 22- 45 3 [9)(x=0 39- 43 35
1 06- 1 23- 1 40- 40
(xxy 07- 34 =] 24. 30 1 41- 45 1
(=] 08- 30 6 25- 45 6 42. 40
2 09- 45 2 26- 40 CHS 43. 16
10- 20 27- 11 44. 13
(sTO0] 7 11- 44 7 0 28- 45 O () 45.- 12
1 12. [9)(x=0 29- 43 35 (9)(GTOo] 00 46-43,33 00
3 13- 45 3 (9)(GTO] 37 30-43,33 37 0 47- 45 0
(9)x<y] 14- 43 34 ) 31- 12 (9](x=0 48- 43 35
(9)(GTO] 47 15-43,33 47 32- 13 (¢J(GTO] 69 49-43,33 69

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
 Keys Display Keys Display Keys Display

(RCL] 6 50- 45 62- 34 74- 40

[(RCL] O 51- 45 O (] 63- 10 =) 75- 30
x] 52. 20 7 64- 45 7 (9]){LsSTx] 76- 43 36
(EEX] 53- 26 (-] 65- 30 (] 77- 10
2 54- 2 [9)(LsTx] 66- 43 36 6 78- 45 6
+] 55. 40 67- 34 (] 79- 10
4 56- 45 4 (g)(cTO0] 00 68-43,33 00 (EEX] 80- 26
(RCL] 2 57- 45 2 4 69- 45 4 2 81- 2
58- 40 2 70- 45 2 82- 20
EEX] 59. 26 71.- 40 (9)(cTO] 00 83-43,33 00
2 60- 2 7 72- 45 7 (f])(P/R]
B 61- 20 1 73- 45 1

Registers:

n: Used i Used PV: Used PMT: Used

FV: Used Ro: Yield Ry: Price R,: Coupon
Rs: # Coupons R4: Redemption Rg: # Days/Yr Re: Used
R, Used Rg: Unused

User Instructions.

Kev in the program, press ({]J[FIN] to clear the finance registers, and press [ST0] [EEX] if the C
annunciator is not displaved.
Kev in the amount of the annual coupon (as a percent) and press [STO] 2.
Kev in the total number of coupons that are received and press [STO] 3.
Kev in the redemption value and press 4.
Kev in the number of davs in a year (either 360 or 365) and press [STO! 5.
Kev in the purchase price (if it is known) as a percentage of par and press [STO] 1.
Kev in the annual vield (if it is known) as a percentage and press 0. If you wish to calculate
the annual vield, press 0 0.
Keyvin the settlement (purchase) date and press [ENTER].
Kev in the date of the next coupon and press (R/S]. If the annual vield is nonzero, the price is
calculated. Otherwise, the annual yield is calculated.
10' When price is calculated, press to display the accrued interest.
11. For a newcase, return to step 2. Only those values that have been changed need to be restored.
Example 1: Bond Price. What is the price and accrued interest of a 20-year Eurobond with annual
coupons of 6.5%, purchased on August 15, 1986 to yield 7%? The next coupon is received on Decem-
ber 1, 1986. The calendar basis is Actual/Actual.

Keys: Display: Description:

Clears financial registers.

Sets C annunciator if it is not lit.
6.5 (STO] 2 €.50@ Stores annual coupon.
20 3 2@, ey Stores number of coupons.
100 (STO] 4 18,06 Stores redemption value.
365 5 365 .00 Stores number of days/year.
7 (ST0] 0 7.8 Stores annual yield.
8.151986 | ENTER | g.1 Enters settlement date.
on

12.011986 [R/S| 4, c
Enters next coupon date and calculates
-
"o

purchase price.
X% 4,58 Displays accrued interest.

Example 2: Bond Yield. What is the yield on a 15-year annual coupon bond purchased on Septem-
ber 15, 1986 at a price of 87"2? The next coupon of 7.6% will be received on April 15, 1987 and the
calendar basis is Actual/Actual.

Keys: Display: Description:

FIN] Clears financial registers.

Sets C annunciator if it is not lit.
7.6 (STO] 2 Stores known values.
@ 0 W = = =)

S
0
=) Th @ N -

15 (s10] 3
D=
NS -

100 (STO] 4
N]

365 [STO] 5
DoU

87.5 [STO] 1
o o
@ -

0(s10]0
9.151986 [ENTER] Enters settlement date.
o

Ln
-—

4.151987 S.18 Calculates annual yield.

Example 3: Bond Price (Short Term). Calculate the price and accrued interest of the following
annual coupon bond: 7% coupon, 8%vield, $100 redemption, settlement date March 21, 1986, matu-
ritv date December 1, 1986, actual day calendar. (The maturity date is the next coupon date and one
coupon will be paid.)

Keys: Display: Description:

HEN) Clears financial registers.

(EEX] Sets C annunciator if it is not lit.
7 (s10] 2 7,080 Stores known values.
1[s10] 3 1.@0
100 [STO 4 100 .00
365 (STO] 5 3e5, 60
8 (sT0] 0 g, aa
3.211986 3.2
J

12.011986 [R/S 89,23 Calculates price.

o

11 Displays accrued interest.

M

X%
[bfl HEWLETT
PACKARD

HP-12C Solutions 12-11

Deposits Needed to Meet a Future Cash Flow Need
Sometimes you want to know how much money you need to save nowto accumulate moneyvfor a
future series of outflows. An example of this situation is saving moneyvfor college. The following
procedure helps determine how much vou need to save each period. You need to know when vou
need the money, how much is needed, and at what interest rate you can invest.

User Instructions.

Part 1. Calculate the present value of the future withdrawals using NPV. Assume a cash flow of 0 at
each period where there is no withdrawal.

Press (f][REG] [g](END].

PN

Press 0 [g]{CFo]
Press 0 [g][CF/]
Kev in the number of pavment periods until the withdrawals begin and press [g)(N]. (If this
number is greater than 99, break the number of payments into two (or more) groups.)
5. Kevin the withdrawal amount and press [g](CFj].
6. Using [(g](CF] and (g]){(N;], continue entering cash flows of 0 and the withdrawal amount through
the last withdrawal.
7. Kev in the periodic interest rate and press [iJ.
8. Press to calculate the net present value of the future cash flows.

Part 2. Solve for the periodic deposit necessary over the entire term.

1. Kev in the total number of deposits and press [n].

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

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Example. Your daughter will be going to college in 12 years and you are starting a fund for her
education. She will need $15,000 at the beginning of each vear for four years. The fund earns 9%,
compounded monthly, and vou plan to make monthlv deposits, starting at the end of the current
month. The cash flow diagram looks like this:

15.000 15.000 15.000 15.000

|
|
|
1 . N
1 2 ‘ 3] 14314411451 "'155"156 157l "'1671168/169]
T T
179|180
t !

il e b b
P ?

How much should vou deposit each month to meet her educational expenses?

Keys: Display: Description:

REG] (g](END Clears finance registers and sets END

mode.
0 (g](CFo] 8.086 Stores initial cash flow.
0 [g](cF @.0a Stores cash flows until withdrawals begin.
99 [o)[N_
0e @00
44 )
15000 (g]l(CF 15,006 .00 Stores first withdrawal.
0 (g)(cF ] @.o0 Stores cash flow of 0.
11 [g]NJ
15000 [g](cF 15,000.00 Stores second withdrawal.
0 [g]J(cF @.00 Stores cash flow of 0.
11 (W)
15000 [g](CF 15,000.00 Stores subsequent cash flows.
0 (g]J(cF
11 (@
15000 (g](CF;
9 (g)(12¢] B.75 Stores monthly interest rate.
17,973 .48 Calculates NPV of withdrawals.
15 (g)(12x] 180 .00 Stores total number of deposits.
PMT | -182.38 Calculates monthly payment.

(b] HEWLETT
/B PACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-11
3-87
(D Jyvrreld
HP-12C Solutions 12-12
Price and Yield to Call (Actual/Actual Day Basis)
This program calculates price and yield to call, assuming a semi-annual coupon pavment and an
actual/actual dayv basis. Prices are based on a par value of 100.

Program.

Keys Display Keys Display Keys Display

(1][P/R] 0 09- 44 O (g])(x=0 19- 43 35

(J[PRGM 00- =) 10- 10 (g)(GTO] 26 20-43, 33 26
(sT0] 2 01- 44 2 11- 13 21. 33
xzy| 02- 34 12- 45 14 22. 42 21
(sT0] 1 03- 44 1 0 13- 45 0 0 23- 45 O
(pv] 04- 45 13 B 14- 10 x] 24. 20
(Fv] 05- 45 15 PMT 15- 14 (gJ(GTO] 00 25-43,33 00
(EEX] 06- 26 (RCL] 1 16- 45 1 26- 33
2 07- 2 (RCL] 2 17- 45 2 Hy1™m] 27- 42 22
(<] 08- 10 0J 18- 45 12 (tJP/R]

Registers
n: Used i: Used PV: Used PMT: Used
FV: Used Ro: Used R;: Settlement R,: Maturity
Ra-RAef Unused

User Instructions.

. Key in the program.

N o b N

Keyin the annual coupon rate (as a percentage) and press (PMT].
Kev in the call price and press (Fv].
Keyin the purchase price and press [PV]. If the purchase price is unknown, keyin 0.
Key in the annual yield (as a percentage) and press []. If the yield is unknown, keyvin 0.
Key in the settlement date and press (ENTER].
Keyin the call date and press [R/S]. If the purchase price is 0, the price to call is calculated. If the
yield is 0, the yield to call is calculated.
8. For a new problem, return to step 2.

Hewlett-Packard supplies the procedures herein without warranty and will not be liable for damages arising from their use.
Example 1. A 10% coupon bond was purchased October 14, 1980 for 97.25. If the bond is called on
March 16, 1986 for 103, what is the vield to call?

Keys: Display: Description:

10 [PMT) 10.00 Stores annual coupon rate.

103 [FV) 103 00 Stores call price.
97.25 97.25 Stores price.
0 @.00 Stores 0 in 1.
10.141980 [ENTER] 16,14 Stores settlement date.
3.161986 [R/S) 11.16 Calculates vield to call.

Example 2. A bond with a 9.5% coupon and a call of 102 has a settlement date of August 28, 1981
and a call date of June 1, 1990. If the bond is to yield 11%, what is the purchase price?

Keys: Display: Description:

9.5 [PMT] g.5@ Stores annual coupon rate.

102 [FV] lez . eo Stores call price.
11 (1) 11,08 Stores vield to call.
8.281981 [ENTER] g.28 Stores settlement date.
6.011990 [R/S] 92 .45 Calculates purchase price.

(fi] HEWLETT
B PACKARD
Portable Computer Division
1000 N.E. Circle Blvd.
Corvallis, OR 97330
12-12
4/87