Financiall Calculator HP 10bII not respond correctly after reset

[thangluong]

I used the Financial Calculator HP 10bII+ to calculate the FV: I input 100 for PV, 10 for I/YR, 2 for N, my calculator gave the FV =-101.67, the correct answer is 121. I tried all the function in the Start guide, it gave the correct answers, except the calculating of PV, FV, or Interest? I reset many times but it still gave the wrong number. Should I send back for repair? I just bought from Amazon 3 weeks ago.

[cyrille]

Hello,

Your calculator is correct, the Future value of an investmenet of 100, at 10% annual, nominal interest rate, for a period of 2 month is 101.67...

The exercise that you are trying to solve (I think, based on the expected result) is for the Future value of an investmenet of 100, at 10% annual, effective interest rate, for a period of 2 years (which is 121).

The problem is that the calculator (like all other financial calculators) is setup to do calculations based on a Nominal and Anual interest rate (based on 12 compounding per year), and 12 payements per year (which N is). Ie: I/YR and N work on different units of time. So you need to be carefull of this issue.

Simlply changing N in 24 will not help because you would be doing calculations based on a nominal interest rate (10%), which correspond to an effective interest rate of 10.47%!

What you need to do is change the number of payements per year to 1 (and you might also need to change the number of compounding per year to 1, but I am not sure, and I do not have a 10BII+ in front of me to test). This should give you the correct result.

Regards,

Cyrille

[thangluong]

Thanks for your reply but the problem is that all my classmates use the same calculator like mine and give the answer is 121.  Another example: You need $10,000 in one year, if the IR=7%/year, how much you need to invest today. The correct answer is 9,345.79 but my calculator gives the answer  9,942. I input FV=10,000, I/YR=7, N=1 (dont mind about the sign +/-). 

[calcpeace]

Hello thangluon,

Cyrille gave you the right advise. Your second post seems to me, that you probably don't understand the game of the three variables:

N = counts of payments

I/Year = Interest Rate per year and

P/Year = How often in a year the Interest Rate calculated (and added/subtracted to the loan).

Last for first: P/Year = 1 You are calculating the interest rate in a year one time, =12  every month, = 365 every day

N get the meaning from P/Year: P/Year = 12 then N = 5 means five month or

                                                             P/Year = 1    then N = 3 means three years

The I/year is based on one year, if you use P/Year = 1 the your amount  your Interest Rate of I/year match to the year.

What happen if you use P/Year = 12 and N = 1: First your calc divide the I/year with 12 and  calculate the amount of cash after one month.

Example: P/Year = 12,  N = 1:  I/year = 6 % : the calculated Interest Rate is 0.5 % (for one month).

PV = 100 $  You get: 100.5 $ [EDIT: "%" before wasn't correct], lets arise N to 5: You get: 102.53 $ (Oh, maybe 3 Cent more then expected, but evereything is alright).

And what happen with N = 12 (all other variables are the same)?:

You get: 106,17 $ 17 Cent more, because of the compound interest effekt.

I hope that helps you to use a not damaged business calc

[BartdB]

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@thangluong wrote:

I used the Financial Calculator HP 10bII+ to calculate the FV: I input 100 for PV, 10 for I/YR, 2 for N, my calculator gave the FV =-101.67, the correct answer is 121. I tried all the function in the Start guide, it gave the correct answers, except the calculating of PV, FV, or Interest? I reset many times but it still gave the wrong number. Should I send back for repair? I just bought from Amazon 3 weeks ago.

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@thangluong wrote:

Thanks for your reply but the problem is that all my classmates use the same calculator like mine and give the answer is 121.  Another example: You need $10,000 in one year, if the IR=7%/year, how much you need to invest today. The correct answer is 9,345.79 but my calculator gives the answer  9,942. I input FV=10,000, I/YR=7, N=1 (dont mind about the sign +/-).

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Both these problems use yearly intervals (not monthly as is normally the case).

Therefore you must set P/YR = 1

[thangluong]

I understand the concept, the problem is why the same calculator, input the same keys, do the same steps, give the different answer. I borrowed my friends (3 calculators, the same model) and input the same steps, all of them gave the same number, only mine gave the different. I cleared all memories, remove the batteries, reset it and it is the same. 

[thangluong]

How to set the Payment per year (P/YR). I follow the guide book but its still the same (the orange arrow down + the P/YR key)

[Tim_Wessman]

You should be pressing 3 keys directly in a row.

[1] [orange_arrow] [PMT]

Do you then see a 1_P/Yr show on the screen?