HP 18C Owner's Manual

HEW

LET

T -PAC

KA

R 0

HP-18C

Business

Consultant

Owner's Manual

HP·18C Business Consultant

Owner's Manual

FliU-

HEWLETT

~~

PACKARD

Edition

1 April 1986

Reorder

Number

00018-90001

y r

~

I-

Notice

The

information

contained

in

this

document

is subject to

change

without

notice.

Hewlett-Packard

makes

no

warranty

of

any

kind

with

regard

to

this

mate-

rial,

including,

but

not

limited

to,

the

implied

warranties

of

merchantability

and

fitness

for a particular

purpose.

Hewlett-Packard

shall

not

be

liable for errors

contained

herein

or

for

incidental

or

consequential

damages

in

connection

with

the

furnishing,

performance,

or

use

of

this

material.

Hewlett-Packard

assumes

no

responsibility for

the

use

or

reliability

of

its soft-

ware

on

equipment

that

is

not

furnished

by

Hewlett-Packard

.

by

Hewlett-Packard Co.

This

document

contains

proprietary

information

which

is

protected

by

copy-

right. All rights

are

reserved.

No

part

of

this

document

may

be

photocopied,

reproduced,

or

translated

to

another

language

without

the

prior

written

con-

sent

of

Hewlett-Packard

Company

.

Portable

Computer

Division

1000 N.E.

Circle

Blvd.

Corvallis,

OR

97330, U.S.A.

Printing

History

Edition

1 April 1986 Mfg.

No

. 00018-90002

Contents

1

11

List of Examples

13

How

to Use This Manual

15 15 15 16

17

20 20 20 21 22 22 23 23 23 25 25 25

29

30

31 31

Starting to

Use

the HP-18C

Installing

the

Batteries

Turning

the

HP-18C

On

and

Off

Setting

the

Display

Contrast

Using

the

Display

Using

the

Keyboard

The

. Key

The

I INPUT I Key

Doing

Arithmetic

Negative

numbers

Using a Result

in

Another

Calculation

Editing

and

Clearing

the

Calculator Line

The

History Stack

Clearing

the

Display

Using

the

Alphabetic

Keys

Using

the

Menu

Keys

The

MAIN

Menu

Changing

Menus

and

Reading

Menu

Maps

Doing Calculations Using

Menus

Making

a Graceful I

EXIT

I

Clearing

the

Display

and

Menu

Variables

When

the

HP-18C

Doesn

't

Understand

What

You

Want

31

Custom

Menus

31

How

to Use

and

Reuse Calculator

Memory

Contents

3

2

3

33 33 33 34

35

36

37 37 37

39 39

41

42 43

44

47 47

49 50

51

53 53

4

Contents

Arithmetic

Introduction Using

the

Calculator Line Simple Arithmetic Chain

Calculations Percent Other

Keyboard Arithmetic

Using Parentheses

in

Calculations

Recalling

Numbers

to

the

Calculator Line

Using

the

History Stack

The

.1

LAST I Key

Using Registers Doing Arithmetic Inside Registers

The MATH

Menu

Functions

Changing

the

Number

of

Displayed Decimal Places Interchanging

the

Period

and

Comma

in

Numbers

Scientific

Notation

General Business Calculations

Introduction Percent

Change Percent of Total Markup

on

Cost

Markup

on

Price

Clearing

the

BUS Variables

Sharing Variables Between

Menus

4

5

6

55 56

58 59

60 60 66

69

73 77

78

81 81

83 83 85

86 86

95 95

97 97 98

100

Time Value of Money

Introduction The

TVM

Menu

Cash

Flow Diagrams

and

Signs of

Numbers

TVM Calculations

Clearing

the

TVM Variables

Loan Calculations Amortization

Savings Calculations Leasing Calculations Interest Rate Conversions Clearing

the

ICONV variables

Cash Flow Calculations

Introduction The

CFLO

Menu

Using

Number

Lists

Cash

Flow Diagrams

and

Signs

of

Numbers

Entering

Cash

Flows

Viewing

and

Editing

the

List

Cash

Flow Calculations

Running Total and Statistics Calculations

Introduction The

SUM

Menu

Using

Number

Lists

Entering

Numbers

and

Viewing

the

Running

Total

Viewing

and

Editing

the

List

Statistics Calculations With

SUM Lists

103

Curve

Fitting

and

Forecasting

Contents

5

7

8

109 110 110

110 111 111 111

112

114

115

116

118

119

121

122

124

125

126

6

Contents

Working With Number Lists

Introduction How

Number

Lists are

Stored

Inserting a Number

Into

a List

Deleting a

Number

From a List

Copying

a List

Number

to

the

Calculator Line

Creating

New

Number

Lists

Naming

and

Renaming

Number

Lists

Viewing

the

List

Name

Switching

Number

Lists

(GET)

Clearing a

Number

List

Time, Alarms, and Date Arithmetic

Introduction Viewing

the

Time

and

Date

Setting

the

Time

and

Date

Changing

the

Time

and

Date Formats

Adjusting

the

Clock

Setting

Alarms

Viewing

and

Setting

an

Alarm

Editing

Alarm

Settings

Acknowledging

an

Alarm

Unacknowledged

Alarms

Clearing Alarms

Date Arithmetic

Determining

the

Day

of

the

Week for

Any

Date

Calculating

the

Number

of

Days Between Dates

Determining

Past

or

Future Dates

Clearing

the

Date

Arithmetic Variables

9

10

127 129 129 130 131 132 132 133 134 134 135

136 136 137 138 138

141 144 148

151 152 152 153 154 154

156 156

The Formula Solver

Introduction The

Formula List

The

SOLVE

Menu Entering Formulas Calculations With

Custom

Menus Clearing User-Variables Viewing Long Formulas Editing a Formula Naming

a Formula

Shared

User-Variables

Deleting

the

Current

Formula

and/or

Its UserVariables Deleting All Formulas

and/or

Their User-Variables

Summary

of

Clear

and

Delete

Operations

How

the

Solver Works

Halting

and

Restarting a Numerical Search

Entering Guesses

Writing Formulas

that

the

Solver

Understands Solver Functions Conditional

Expressions

Printing

Introduction Printing

Modes

The

Print

Annunciator

Trace

Mode

Manual

Print

Mode

Printing

Values Stored

and

Calculated Using Menus Printing

Descriptive Notes

Printing

an

Amortization

Table

Contents

7

Appendixes &

Index

159 159 161 161 162 162

162 163 163 164 165 166 166 167 167 168 168 168

169 169 170 170 171 172 173 178 178 179 180 180

181 181 182 183

8

Contents

Appendix

A:

Customer Support, Warranty, and

Service

Obtaining

Help

in

Operating

the

Calculator

Answers to

Common

Questions

Limited One-Year Warranty

What

We

Will

Do

What

Is

Not

Covered

Warranty for

Consumer

Transactions

in

the United Kingdom Obligation to Make

Changes

Warranty

Information

Determining

If

the

Calculator Requires Service

Confirming

Calculator

Operation-the

Self-Test

If

the

Calculator Requires Service

Obtaining

Service in

the

United States

Obtaining

Service in Europe

International

Service

Information

Shipping

Instructions Service Agreements Service

Charge

Warranty

on

Service

Appendix

B:

More

About

HP-18C

Calculations

IRR% Calculations

Possible

Outcomes

of

Calculating IRR%

Halting

and

Restarting

the

IRR% Calculation

Storing a Guess for IRR%

Solver Calculations

Direct Solutions Numerical Solutions

Formulas

Used

by

HP-18C

Menus Actuarial Functions General Business Time Value of

Money Amortization Interest Rate Conversions Cash

Flow Calculations

Sum

and

Statistics

Forecasting

Appendix C: Caring for and Using Your Calculator

185

Batteries

185

Low

power

indicator

185

Installing Batteries

187

Resetting

the

Calculator

188

Erasing

Continuous

Memory

189

Managing Calculator Memory

191 Calculator Maintenance 191 Clock Accuracy 192

Environmental Limits

192

Safety

and

Regulatory

Information

192

U.s.A. Radio Frequency Interference

193

South

African Radio Frequency Interference

193

Germany

Radio Frequency Interference

193

France Radio Frequency Interference

193

Air Safety Notice (U.S.A.)

195

Appendix

D:

Error Messages

201 Appendix

E:

Menu Maps

207

Index

Contents

9

List

of

Examples

The following list

groups

the

examples

by

chapter

. The list

shows

only

the

longer

examples-those

that

require a

moderate

number

of

steps.

Shorter

examples are

scattered

throughout

the

manual.

1

2

3

4

27

36

48 49

51

52 54

60 62

64

68 69

71

Starting to Use the HP-18C

Using

menus

Arithmetic

Calculating simple interest

General Business Calculations

Calculating

the

percent

change

Calculating

the

percent

of

total

Markup

on

cost calculations

Calculating

markup

as a percent of price

Using

shared

variables

Time Value of Money

A car loan A

home

mortgage

A

mortgage

with a balloon

payment

Amortization

schedule for a

home

mortgage A savings account An

Individual Retirement Account

List

of

Examples

11

5

6

8

9

10

73 74

78

88

90

92

99

101 105

118

123 125 126

128

139 146

153

156

Calculating a lease

payment

Present

value

of

a lease

with

advanced

payments

and

option

to

buy

Converting

from a

nominal

to

an

effective interest

rate

Cash Flow Calculations

Calculating IRR%

and

NPV

of

an

investment

An

investment

with

grouped

cash flows

An

investment

with

quarterly

returns

Running Total and Statistics Calculations

Updating

a checkbook Statistics calculations Curve

fitting

Time, Alarms, and Date Arithmetic

Setting

the

date

and

time

Setting

and

clearing

an

alarm

Calculating

the

number

of

days

between

two dates

Determining

a future

date

The Formula Solver

Entering a

formula

and

using a custom

menu

Using guesses

in

a numerical solution

Calculations for a loan

with

an

odd

first

period

Printing

Tracing

an

arithmetic calculation

Printing

an

amortization

table

12

List

of

Examples

How

to

Use

This Manual

We

know

that

somewhere

out

there we could find a few people

who

are delighted at

the

prospect

of

reading

an

instruction

manual

cover-

to-cover-tables,

footnotes,

and

all.

If

you are

about

to immerse

yourself

in

this manual, we wish you

happy

reading. We've worked

diligently to make it a quality work

of

non-fiction.

Chances are, though,

that

you are

one

of

the

vast majority

who

likes

to

learn

by

seeing

what

happens

when

you press keys. The

HP-18C

has

been

designed to

help

you

do

just that. We've designed

the

man-

ual

to

be a companion

to this

process-something

you

use

to

answer

particular questions

or

to guide you

through

a particular procedure.

If

you'll

be

using

the

manual

that

way, we

have

some suggestions to

help

you

learn

to use

the

HP

-18C as quickly as possible.

• Take

the

time to

read

chapter 1.

Chapter

1 gives you

an

overview

of

how

the

HP-18C

works,

and

introduces

terms

and

concepts

that

are

used

throughout

the

manual. After you've

read

chapter 1, you

will

be

ready

to

start

using all

of

the

calculator's features, reading

other

portions

of

the

manual

when

necessary.

• Match

the

problem

you

need

to solve

with

the

calculator's capabili-

ties. There are several

ways

to locate

information

about

the

HP-18C's

features:

the

table

of

contents,

the

subject index,

the

list

of examples,

and

the

menu

maps

in

appendix

E.

• Before doing

any

time-value-of-money problems or cash flow prob-

lems,

learn

how

the

calculator uses positive

and

negative

numbers

in

financial calculations. For this information, refer to pages 58

and

83.

How

to

Use

This

Manual

13

After

you've

used

the

HP-18C

and

the

manual

for a while, please

take

the

time to fill

out

and

mail

the

self-addressed

card labeled

"

Comments

on

the

HP-18C

Owner

's Manual."

We

will

benefit

from

knowing

where,

in

your

opinion, we

could

use

some

improvement

.

If

you

think

we've

done a good

job, we 'd like to

know

that

too.

14

How

to

Use

This

Manual

Starting

to

Use

the

HP-18C

Installing the Batteries

1

The

HP-18C

is

powered

by

three

N-cell alkaline batteries. Batteries

are

included

with

the

calculator.

If

the

batteries

are

not

already in-

stalled, follow

the

instructions

that

start

on

page

185.

Turning the HP-18C

On

and Off

To

turn

on

the

calculator, press I ON I. Pressing I

ON

1 again

turns

the

HP-18C

off. Since

the

HP-18C

has

Continuous

Memory,

turning

it

off

does

not

affect

the

information

you've

stored there.

To

conserve energy,

the

HP-18C

turns

itself off

ten

minutes

after you

stop

using it.

If

you see

the

low

battery

symbol (c::::J)

at

the

top

of

the

display,

you

should

replace

the

batteries as

soon

as possible. Follow

the

in-

structions

starting

on

page

185.

Setting the Display Contrast

The

display brightness

and

sharpness

depend

on

lighting, your view-

ing angle,

and

the

display contrast

setting. To

change

the

display

contrast,

hold

down

the

I

ON

1 key

while

you press

[I)

or

[I]

.

1:

Starting

to

Use

the

HP-18C

15

Using

the

Display

Key in

the

simple

addition

problem

25 + 100

by

pressing

[]][[]GOJ[QJ[QJG. Notice

how

the

cursor

(.)

marks

the

position

where

the

characters are

displayed. When

you're

done,

the

display

should

look like

the

one

below, except

that

the

pictures

at

the

top,

called

annunciators,

won't

be

on.

Figure 1-1.

The

Display

"Shift" (. ) is active. (page

20)

\

The alpha-

betic keys are active. (page

23)

J

a

An alarm is The batteries The HP-18C past due. are low. is sending in(page 122) (page 185) formation

to

/ / /

:~:g~';~~~i

c::J

Q

Annunciators

I

Line 1 line

2

125.

121121

Line

3,

the calculator

ClEIIlD!lllli!IDImlIlmIJDmmI.

line .

Menu labels

for

the MAIN menu .

To

display the MAIN menu, press the .

key, then

1

EXIT

I.

16

1:

Starting

to

Use

the

HP-1Se

Line 3, the calculator

line,

is

used

for arithmetic calculations.

At

times,

the

calculator line is also

used

as

an

edit

line.

Information

you type is

displayed

on

the

calculator line,

where

it

can

be

edited. Then, de-

pending

on

the

type

of

calculation you

are

doing,

some

other

key

enters

that

information

into

the

HP-18C.

The contents

of

lines 1

and 2 depend

on

the

type

of

calculation you

are doing. Sometimes those lines display a history

of

the

of

the

calculator line. At

other

times, lines 1

and

2 display a

variety of

information,

such

as results

of

calculations, lists

of

num-

bers,

the

time

and

date,

and

instruction messages.

When

you

turn

the

HP-18C

on

for

the

first time,

numbers

are

dis-

played

with

two decimal places

and

with a period

as

the

decimal

point.

You

can

change

the

number

of

decimal places,

and

you

can

also

interchange the use

of

commas

and

periods

in

numbers

(for example,

change 1,000 .00 to 1.000,00). Refer to pages 43

and

44 for

additional

information.

Using

the

Keyboard

Figure 1-2 illustrates

the

HP-18C

keyboard

and

briefly describes

the

use

of

many

of

the

keys .

1:

Starting

to

Use

the

HP-18C

17

Figure 1-2.

The

Keyboard

Alphabetic keys. Your calculator keyboard does not show the shifted keys

on this side

of

the

keyboard.

To

Access

These

Applications:

Loans, Savings, Amort. Interest Rate Conversions

Cash Flows (IRR

%, NPV)

Press

The

Menu

Keys

DtrecUy

Below

These

Words On

The

DIsplay:

% Change, %

Of

Total,

Markup

Runnmg Total, Statistics

Days Between Oates

Set AppOintments Enter Your

Own

Formula

A

BIIII

BBB

I

{ } [ I

II.

DII

••

\ N 0

- .

..

BIIB

BBII

.@ &

(j

I I *

II

II!!!!!!.

< ) l. £ • .

BB!!IIII!!

Insert character

Delete character

18

1:

Starting

to

Use

the

HP-18C

1.00

2.00

3.00

Enter information from the calculator line

ON/OFF

'------Move

the list pointer,

roll the history stack

__

··sn"TT

key

_-":t("\"",

and recall

numbers

ange the number

of displayed decimal places; change the decimal point (.

or

,)

keys

isplay MAIN menu

_l-H-_-Display

previous menu

-41-1+---l,..lear calculator line Backspace

Arithmetic operators

1:

Starting

to

Use

the

HP·18C

19

Throughout

this

manual,

boxes are

used

to indicate labeled

keyboard

ke

ys-for

example,

'INPUT

I

and

G .

The

blank

keys

under

the

display

are described according to

the

labels

above

the

key

in

the

display-for

example, _

and

I11III.

When

the

HP-18C

displays instruction messages, it uses certain

sym-

bols to indicate keys .

Square

brackets indicate

the

labeled

keys-for

example, [INPUT]

and

[

+]

. Curly braces indicate

the

blank

keys-for

example, {FIN}

and

{SOLVE

}.

The . Key

Some

of

the

keys

have a second

purpose

printed

in gold

above

the

key.

The

gold shift key accesses

these

operations. To

do

a "shifted"

operation, press

and

release . to

turn

on

the

shift

annunciator

(----1').

Then, press

the

key. For example , pressing . followed

by

[!]

(also

written

.,

CLEAR I clears

the

calculator line.

If

you press .

by

mistake, press . again to

turn

off

the

shift

annunciator.

The I INPUT I Key

The

'INPUT

I key is

used

in certain calculations to

enter

information

from

the

calculator line

into

calculator memory. Using

'INPUT

I is cov-

ered

throughout

the

manual.

Doing

Arithmetic

Arithmetic is

done

on

line

3-hence

the

name

calculator line. This is a

brief

introduction

to

the

four

operator

keys-G,

B,

0 ,

and

[I).

Arithmetic is covered

in

greater detail

in

chapter

2.

If

you

make

a

typing mistake,

use

[!]

to backspace to

the

wrong

character.

20

1:

Starting

to

Use

the

HP-18C

To

add

721.07

and

223.89:

Keys:

721 .

070

223.89

Display:

721 .07

+223.89

944.96

Description:

The

equals sign com-

pletes

the

calculation.

Once

the

HP-18C

has

completed

a calculation, pressing

another

num-

ber

key

starts a new

calculation.

The

display

keeps

a record

of

your

previous results . Here

are

some

additional

arithmetic

problems

:

Keys:

Display:

Description:

877.35

[J

Subtraction.

930.890

-53.54

650120

780.00

Multiplication.

Negative

Numbers

There

are two

ways

to key in

negative

numbers:

• Key

in

the

number

and

then

press

~.

•

If

the

number

follows

an

operator, you

can

press

[J

before keying

in

the

number.

Keys:

Display:

Description:

75~

-75

Changes

the

sign

of

75.

830

-25.00

Calculates

-75

3.

4.

520

[J

7.1

[J

after 0

changes

the

8120

-2.67

sign

of

7.1.

1:

Starting

to

Use

the

HP-18C

21

Using a Result in Another Calculation

As

you've

seen,

pressing a number

key

when

the

calculator

line

con-

tains a result

starts a new

calculation

.

If

you

press

an

operator

key

instead, the

HP-18C

continues

the

calculation:

Keys:

7501450

IT] 3.5 0

Display:

220.00

62.86

Description:

Calculates

75 + 145 .

Divides

220

by

3.5.

The

HP-18C

lets

you

do

chain

calculations

(calculations

based

on

the

results

of

without

using

0

at

the

conclusion

of

each

step.

Chapter 2 shows

you

how

to

do

this.

Editing and Clearing

the

Calculator Line

The

cursor

is visible

when

you

are

in

the

process

of

keying

in a num-

ber

or

doing a calculation. When

the

cursor

is visible,

pressing

[!]

deletes

the

last

character

you

keyed in.

When

the

cursor

is

not

visible,

pressing

[!]

erases

the

rightmost

number

.

To

clear

the

calculator

line

to

0.00,

press

.1

CLEAR I.

Keys:

Display:

Description:

12345

[!][!]

Edits

the

calculator

line

.

. 66

123.66

018.950

142.61

Calculates

123.66

+ 18.95 .

• 1 CLEAR I

0.00

Clears

the

calculator

line

22

1:

Starting

to

Use

the

HP-18C

The History

Stack

Notice

how

lines 3, 2,

and 1 show

the

results of

the

current

calcula-

tion

and

the

two

that

preceded

it. This record of

your

activities is

called

the

history

stack.

Figure 1-3. The History Stack

-2.67

62.86

0.00

IEIIII!lIIIi!IDIDlll1ImImmml

Line 1 } Line 2

Line 3

History

stack

Since

the

HP-18C

uses

the

display

for a variety

of

purposes,

some-

times

the

history stack is

replaced

by

other

information.

Using

the

history stack is

covered

on

page

37.

Clearing

the

Display

Pressing

.1

CLEAR

ALL

1 clears

the

history stack. Sometimes,

.1

CLEAR

ALL

1

has

other

functions. Refer to

page

31 for

additional

in-

formation

about

.1

CLEAR

ALL

I.

Using

the

Alphabetic

Keys

There are a

number

of

situations

where

the

HP-18C

requires you to

type

alphabetic

information

into

line

3.

When

line

3 is

being

used

to

type in

alphabetic

information,

the

alphabetic

annunciator

(U)

comes

on. The

editing

keys described

in

table 1-1 are active

when

the

alpha-

betic

annunciator

is on.

1:

Starting

to

Use

the

HP-18C

23

Table

i-i.

Alphabetic editing keys.

Key

Description

~

Backspace; erases the character to the left

of

the cursor .

• 1 CLEAR I

Clears the calculator line.

a

Moves the cursor one space

to

the left.

. a

Moves the cursor to the first character on the line.

El

Moves the cursor one space

to

the right .

•

El

Moves the cursor to the end

of

the line.

[ill§]

Inserts one blank space at the cursor position, into which you can type a character.

I DEL I

Deletes the character at the cursor position.

The

keyboard

illustration

on

page

18

shows

shifted

alphabetic

char-

acters

that

aren't

printed

on

the

keyboard.

You

can

use

these

characters as you

would

any

other

alphabetic

character.

If

you press

an

alphabetic

key

when

the

(U)

annunciator

is

not

on,

the

HP-18C

displays:

PRESS EXIT,

OR

TYPE

A

MESSAGE

& PRESS [PRNTJ

•

If

you

have

the

printer

designed

for

use

with

the

HP-18C,

you

can

now

print

a message (refer to

page

156 for

additional

information).

Otherwise, you

should

press I EXIT I to erase

the

message.

Using

the

alphabetic

keys is

covered

throughout

the

manual,

as

necessary.

24

1:

Starting

to

Use

the

HP-18C

Using

the

Menu Keys

The

six

blank

keys

at

the

top

of

the

keyboard

and

six labels

on

the

bottom

line

of

the

display

are related to

one

another. The

labels tell

you

what

the

keys do.

The

labels

are

on

the

display,

rather

than

on

the

keys themselves,

because

the

keys

do

different

things

at

different

times.

The

six keys are called menu

keys;

the

labels are called menu

labels.

Figure 1-4. Menu Keys and Menu Labels

/

-2.67

62.86

0.00

••.

4.

i

••••

irlil.1iS1

1W:IIlirlii

II:.

/

,

gggggg

PRINTER

MAIN

gEIIEE~

Depending

on

what

calculations you are doing,

the

HP-18C

displays

a

particular

set

of

labels, called a menu.

The

menu

presents

the

choices of

what

you

can

do

next.

The

MAIN

Menu

No

matter

which

menu

you

are

currently using, pressing

.1

MAIN I dis-

plays

the

MAIN

menu. The

MAIN

menu

is a set

of

primary

choices.

Starting

from

the

MAIN

menu,

you

can

eventually

display

any

other

menu.

Table 1-2 describes

the

types

of

operations

done

within

each

major

category.

1:

Starting

to

Use

the

HP-18C

25

Table

1·2.

The MAIN Menu

Menu

Key

Operations

Done

in

This

Category

Covered

in:

-

Time-value-of-money (loans, savings, leas- Chapter 4

(Finance) ing, interest conversions).

Cash flows, internal rate

of

return, net Chapter 5

present

va

lue .

..

Percent

of

total , percent change, markup on Chapter 3 (General cost , markup on price . Business)

..

Running totals, statistics, curve fitting,

Chapter 6

forecasting .

...

Clock, calendar, alarms, date arithmetic.

Chapter 8 (Time manager)

..

Creating and using your own (custom) Chapter 9 (Formula menus for calculations. Solver)

...

Math functions Chapter 2

Changing Menus and Reading Menu Maps

Figure 1-5 is a me

nu

map

illustrating

three

menus. The

top

row

is

the

MAIN

menu

. Pressing

the

..

key

displays

the

BUS

(general busi-

ness)

menu. Then,

pressing III!EII

displays

the

MU%C

(markup

as

percent

of

cost)

menu. There

are

no

menus

that

branch

from

the

MU%C

menu

because

the

MU%C

menu

is a final

destination-you

use

it to

do

calculations,

rather

than

to

choose

another

menu.

26

1:

Starting

to

Use

the

Hp·18C

Figure 1-5. A Menu Map.

FIN

BUS

SUM TIME SOLVE MATH

MAIN

1

Menu

f Press

I

1

EXIT

1

BUS

Press

%CHG

%TOTL

MU%C

MU%P

Menu

.'MAINI

I

f Press

I

1

EXIT

1

MU%C

COST

PRICE M%C

Menu

In

addition

to pressing

menu

keys,

there

are two

other

ways

to

switch

menus:

• Press 1

EXIT

1 to

return

to

the

.

• Press

.1

MAIN

1 to

return

to

the

MAIN

menu.

When a menu

has

more

than

six labels, a

menu

key

labeled

..

is

used

to

switch

between

sets

of

labels.

Example: Using menus. Use figure 1-5 as you follow

along

in

this

example.

The

example calculates

the

percent

markup

on

cost of a crate

of

oranges

that

a grocer

buys

for $4.10

and

sells for $4.60.

Step

1 Decide

which

menu

you

want

to use.

The

MU%C

(markup

as a

percent

of cost)

menu

is

our

destination.

If

it's

not

obvious

to you

which

menu

you

need,

look

up

the

topic

in

the

subject index

and

examine

the

menu

maps

in

appendix

E.

Displaying

the

MU%C

menu:

Step

2

Step

3

Step

4

To

display

the

MAIN

menu,

press

.1

MAIN

I. This

step

isn't

always necessary,

but

it is

useful

when

you

want

to

start

from a known

location

on

the

menu

map.

Press I11III to

display

the

BUS (general business)

menu.

Press

II1II

to

display

the

MU%C

menu.

1:

Starting

to

Use

the

HP-18C

27

Using

the

MU%C

menu:

Step

5

(Optional)*

Step

6

Press

.,

CLEAR ALL I to clear

the

history stack

and

set

the

values

of

COST, PRICE,

and

M%C

to

O.

Key in 4.10

and

press

..

. This stores 4.10 as

the

COST.

Figure 1-6. Storing the COST

I

cosr=4.10

.lD!DlimDDDI

Step

7

Key in 4.60

and

press

..

to store 4.60 as

the

PRICE.

Figure 1-7. Calculating the Markup as a Percent of Cost

COST=4.10 PRICE=4.60 MARKUP%C=12.20

ID!DlimDDDI

Step

8

Step

9

Press

..

to calculate

the

markup

as a

percent

of

cost.

The

answer: MARKUP%C=

12.20.

To

leave

the

MU%C

menu,

press ,

EXIT

I (to display

the

BUS

menu)

or

.,

MAIN I (to display

the

MAIN

menu)

.

• This

step

is optional because COST, PRICE,

and

M%C are cleared

whenever

you press

lIB

to

display

the

BUS

menu.

However, since you

may

not

always

return

to

the

MAIN

menu

between

calculations, you

may

want

to get into

the

habit

of

clearing before

starting

a

new

calculation.

28

1:

Starting

to

Use

the

HP-18C

DOing

Calculations Using Menus

Many

menus

do

calculations

in

much

the

same

way

as

the

calculation.

You

use

the

menu

keys

both

to store

numbers

used

in

the

calculations

and

to

do

the

calculations.

Figure

1-8 illustrates

using

the

MU%C

menu

to calculate

the

percent

markup

on

cost. Figure 1-9

shows

another

calculation

using

the

MU%C

menu.

This time,

the

calculation uses

the

COST

and

M%C

to

calculate

the

PRICE.

Figure 1-8. Calculating

M%C

Keys

: 4.60

IiIIII

Display

: P RIC E = 4 .

6e

__

S_to_r_e_4_.6-;::0====~

1--------

.....

Keys

: 4.10_

Display: COST=4.

113

Keys

: _

Store 4.10

Display:

MARKUP%C= 12.

213

Figure 1-9. Calculating

the

PRICE

Keys:

20

_

COST

PRICE

M%C

Calculate 12.20

Calculator

Memory

Display:

MARKUP%C=2e.ee

__

~S~to=r~e~2=O~

.

0=0~

__

~

-------£==~-------1\~----~

4.10_

:::::'l

\/

Keys

:

Display

:

COS

T = 4 . 1

13

_.:.St.:..:o~re:-:.4.:...:.1~0r_-"::l

V V

COST

M%C

Calculator

Memory

Keys:

IiIIII

..,.A'I

__

--l,:;-:;:::--:;::=-:-::

Display:

P

RICE

=4 . 92

<Jr-

__

-CC:a=lc=u=la=te=4~

.

9~2~

_______

J

1:

Starting

to

Use

the

HP-18C

29

Notice

that

the

two calculations use

the

same

three storage locations;

each

location is

used

both

to store

and

to calculate values. These stor-

age locations are called

built-in variables, because they

are

permanently

built

into

the

HP-18C

and

because their contents vary

as you store

and

calculate

different

numbers.

The

rules for using variables are:

• To

store

a

value,

key

in

the

number

and

press

the

menu

key. *

If

you

haven't

just

keyed

in a number

(for example,

you've

just

switched

menus

and

you

want

to store

the

number

already

in

the

calculator line), press , STO I followed

by

the

menu

key.t

• To

calculate

a

value,

press

the

menu

key

without

first keying in a

number. In

other

words,

when

you press two

menu

keys

one

after

another,

the

second

key does a calculation. The

HP-18C

displays

CALCULAT I

NG

...

when

a value is being calculated.

• To

display

a

value,

press [RCL I followed

by

the

menu

key. For ex-

ample, [

RCL

I I11III displays

the

value stored

in

COST.

• To

clear

all

the

variables

in

a

menu,

press

.,

CLEAR

ALL

I

while

the

menu

is displayed. This also clears

the

history stack. Clearing a

menu

is useful

when

you

want

to

start a new

calculation

without

worrying

about

what

numbers

may

have

previously

been

stored.

Making

a

Graceful

I

EXIT

I

The

[

EXIT

I key is

used

to switch to

the

previously displayed

menu.

One

particularly

important

use

of

[

EXIT

I is for backing

out

of

a mistake

made

while

switching

menus.

For example, if you accidently

pressed

II!IIII in

the

BUS

menu

when

you

meant

to press

1IiI!IIII

, pressing

[EXIT

I would

return

you to

the

place

where

you

made

the

mistake-

the

BUS

menu.

• An incomplete arithmetic calculation is completed. For example,

2050

I11III

stores 100

in COST.

t

If

the

calculator line contains two or

more

numbers, I STO I menu key stores only

the

rightmost

number

into

the

variable. For example,

2050

I STO I" stores 50 in COST.

30

1:

Starting

to

Use

the

HP-18C

Clearing

the

Display and Menu Variables

The

.1

CLEAR

ALL

I key is a powerful clearing feature:

• Pressing

.1

CLEAR

ALL

I always clears

the

history stack.

•

If

the

current

menu

consists

of

variables (for example, COST,

PRICE,

and

M%C

in

the

MU%C menu), those variables are cleared

to

O.

•

If

the

HP-18C

is

displaying a

number

list

or

formula list,

.1

CLEAR

ALL

I clears all

the

information

from

the

list. Clearing

num-

ber

lists is covered in

chapter

7;

clearing

the

formula

list is covered

in

chapter

9.

When

the

HP-18C

Doesn't

Understand What

You Want

Suppose

you tried to calculate

the

markup

on

cost

without

storing a

value for COST. COST

would

have

a value

of

0,

and

the

calculator

would be

unable

to

do

the

calculation.

To

help

you correct

the

situa-

tion,

the

HP-18C

beeps

and

displays a message.

The

message is

erased from

the

display the next time you press a key.

Refer to

appendix

C for

additional

information

about

error messages .

Custom Menus

The

HP-18C

has

a set

of

built-in formulas

used

by

some of its menus.

For instance,

the

markup

calculations

on

the

previous pages use a for-

mula

stored

permanently

in calculator memory.

The

HP-18C

lets you

enter

your

own

formulas

into

memory,

which

are

then

used

to create

menus

customized for your particular

needs-

custom

menus. Creating

and

using

custom

menus

is

done

by

the

for-

mula

solver,

which

is covered

in

chapter

9.

1:

Starting

to

Use

the

HP-18C

31

How

to

Use

and Reuse Calculator Memory

The

HP-18C

lets you store

many

different

types of

information

in cal-

culator memory. Each piece of

information

requires a certain

amount

of storage space . Eventually, you

may

see

the

message:

INSUFFICIENT

MEMORY

If

you

encounter

this message, you will

have

to erase previously

stored

information

before you

can

store

any

new

information. The

types

of

information

that

use

calculator memory,

and

the

amount

of

memory

they

use,

are

covered

in

the

section

Managing

Calculator

Memory

on

page

189.

In

addition

to erasing

portions

of

memory,

the

HP-18C

allows you to

erase all

the

information

you've

stored

inside

the

calculator. This is

covered

in

the

section

Erasing

Continuous

Memory

on

page

188 .

32

1:

Starting

to

Use

the

HP-18C

2

Arithmetic

Introduction

Chapter 1 introduced

you to

using

the

calculator line for

doing

simple

arithmetic.

Chapter

2 contains

additional

information

on

doing

arithmetic calculations.

Using the Calculator Line

You

can

use

the

calculator line (line 3) to

do

arithmetic calculations

at

any

time, except

when

the

alphabetic

annunciator

(U)

is on.

Some-

times

the

HP-18C

displays letters

on

the

calculator line,

even

though

the

alphabetic

annunciator

is off. For example,

the

calculator

line

might

contain:

TOTAL=124.60

Then,

pressing 0 2 0

would

calculate 124.60

plus

2,

and

the

HP-18C

would

display

the

answer, 126.60.

Simple Arithmetic

Here

are

some

examples

of

simple arithmetic using

the

keys

0,

Q,

0,

[B,

and

.LJ (

.LJ

raises a

number

to a power). Notice

how

the

o

key

completes

the

calculation.

You

can

also

use

I INPUT I to complete

calculations.

*

•

If

the

HP-18C is displaying

the

CFLO or

SUM

menu,

[INPUT

I causes

the

result

of

the

cal-

culation to be

entered

into

the

number

list.

2:

Arithmetic

33

Keys:

Display:

Description:

54.69

~

28.33

0

83.02

7500120

9,000.00

Pressing a

number

key

after

0 starts a

new

calcula tion.

1.08

.c:J

50

1 .

47

Calculates 1.08

5

.

Chain Calculations

Chain

calculations involve

doing

more

than

one

operation

at

a time .

Here's

one

type

of

chain

calculation,

based

on

the

previous example:

Keys:

7500120

Display:

9,000.00

Description:

Pressing a

number

key

after

0 in

the

new

calcula tion.

Now

see

what

happens

when

you press

an

operator

key after

0.

03600

25.00

The

calculation contin-

ues, using

the

results

of

the

previous calculation.

Th

' . d h

I

I·

c

7

.""-.SO=---X--=..12=--

ere s

an

eaSIer

way

to 0 t e ca cu atlOn - 360

7500120

9,000.00.;.

3600

25.00

34

2:

Arithmetic

You

don't

need

to press

0.

The

HP-18C

dis-

plays

the

intermediate

answer. Press

0 to complete

the

calculation.

Here's a longer

chain

calculation

.

456 -

75

68

x

18.5 1.509

Watch

what

happens

in

the

display

as

you

key

it in:

456 G 75 0

18.50 680

1.5090

Percent

381.00.;-.

20.59x 1,400.43.;-.

928.05

In

most

cases, 00

divides

the

number

furthest

to

the

right

by

100.

The

one

exception

is

when a plus

or

minus

sign

precedes

the

number.

Then,

the

00

key

uses

the

rightmost

number

as a percent,

and

calcu-

lates

that

percent

of

the

number

preceding

the

plus

or

minus

sign.

Find

27%

of

85 .3.

Keys:

Display:

85.3 0

27

00

85.30;<0.27

o

23.03

Description:

Divides

27

by

100

.

Calculates

27%

of

85.3

Calculate

the

number

that

is

10%

greater

than

25.

25

[B

1000

o

25.00+2.50

27.50

Calculates

10%

of

25.

Completes

the

calcula-

tion.

2:

Arithmetic

35

Example: Calculating simple interest.

You

borrow

$1,250 from a

relative,

and

agree to

repay

the

loan

in a year

with

7%

simple interest.

How

much

money

will you owe?

Keys:

Display:

1250

G 7 00

1,250+87.50

o 1

..

337.50

Other

Keyboard

Arithmetic

Description:

Interest

on

the

loan

is

$87.50 . You

must

repay

this

amount

at

the

end

of

one

year.

The

other

keyboard

arithmetic keys

are

.~

,

.em

,

and

.0

.

They

act

on

the

number

furthest

to

the

right.

Keys:

4

.~

20

.em

G

47.2

o

1.1

.0

Display:

0.25

4.47

+47.2

51.67::<:

51.67::<:1.21

62,52

5.00

36

2:

Arithmetic

Description:

Calculates

the

reciprocal

of

4.

Calculates

V2D.

Calculates 4.47 + 47.20.

Calculates 1.12. Completes

the

calculation. Calculates

the

cube

root

of

125.

Using

Parentheses

in Calculations

Use

parentheses

when

you

need

to

postpone

calculating

an

interme-

diate

result

until

you've

entered

more

numbers

. For example,

suppose

you

want

to calculate:

30

x 9

85 - 12

If

you were to key

in

30885

G,

the

HP-18C

would

calculate

the

intermediate

result, 0.35. However,

that's

not

what

you

want. To

de-

lay

the

division

until

you've

subtracted

12,

use

parentheses:

Keys:

Display:

Description:

30 8ITJ 85 G

30.00.;.(85.00-

No

calculation is

done

.

12

OJ

30.00.;.73.00

Calculates 85 - 12.

09

0.41x9

Calculates 30 / 73.

0

3.70

Calculates 0.41 x 9.

Recalling Numbers to

the

Calculator Line

Sometimes, you

may

want

to

include

the

result

of

a previous calcula-

tion

in a

new

calculation.

There

are several

ways

to

reuse

numbers.

Using

the

History

Stack

When

you

start a new

operation

on

the

calculator line,

the

moves

to

line

2,

and

eventually, to

line

1.

Lines 1,

2,

and

3

display

three

lines

of

the

history

stack-a

record

of

activities.

2:

Arithmetic

37

Figure 2-1. The History

Stack

"Invisible"

----.

1.00

Number

~I~~:~~~~~---------------'I

.

1IEIIe.l!i!IDIlIllJ]lmIlDlIriID

.

2.00

I

UJe.l!i!IDIlIllJ]lmIlDlIriID

I

The

ITJ

and

ITJ

keys "roll"

the

history stack

down

or

up

one

line.

You

cannot

roll

the

history stack

when

there

is

an

incomplete

calculation

in

the

calculator line.

The

history stack

can

contain

up

to four

numbers-the

three

visible

numbers

and

the

last

number

that

rolled

up

off

the

top

of

the

display.

Pressing

ITJ

brings

the

number

back

down.

Also,

if

you

hold

down

[!]

or

ITJ,

you'll see

that

the

history stack

wraps

around

on

itself.

The

top

three

numbers

in

the

history stack are automatically cleared

whenever

you

switch

menus;

the

number

on

the

calculator line is re-

tained

so

that

you

can

use

it

in

other

calculations.

Pressing

.1

CLEAR ALL 1 clears

the

history stack,

and

sometimes

also

clears

other

information

from calculator memory. Refer to

page

31 for

additional

information

about

.1

CLEAR ALL 1 .

Keys:

Display:

Description:

75.55

r.::::J

32.63

~

42.92

150

[I]

7

~

21.43

42.92

moves

to

line

2.

38

2:

Arithmetic

Now, suppose you

want

to multiply 42.92 x 11. Using the history

stack saves you time.

42.92

011

G

472. 12

The

.1

LAST I

Key

Moves 42.92 back to

the

calculator line .

The

.1

LAST 1 key copies the

number

in line 2 into a calculation you

are in the process of doing .

39 + 8

For example, here is one way

to

calculate

----,=~~~=

V123

+

17

Keys:

Display:

Description:

123

GJ

17 G

140.00

Calculates 123 + 17.

•

em

11

.83

Calculates

Y140

.

39

GJ 8 GJ

Copies 11.83

to

the

cal-

.1

LAST)

47.00.;.11.83

culator

line.

G

3.97

Completes

the

calculation.

Using Registers

The

1

STO)

key copies a

number

from

the

calculator line

to

a desig-

nated

storage area, called a register.

There

are four registers

in

calculator memory,

numbered

0,

1, 2 and

3.

The

1

RCL)

key recalls

stored

numbers

back

to

the

calculator line.

If

there

is more

than

one

number

on

the

calculator line, 1 STO ) copies

only

the

rightmost

number.

2:

Arithmetic

39

To

store

or

recall a

number

using

a register:

1.

Press [

STO

1

or

[

RCL

I.

2.

Key

in

0, 1, 2, or 3.

To

cancel

the

store

or

recall after

you've

pressed

[

STO

lor

[

RCL

I,

press

~.

The

following keystrokes

do

these

two calculations

using

two

registers.

475.6

39.

15

Keys:

Display:

475

.6

[sTol1

475.60

GJ

39.15

[STO 1

2

475.60~39.15

o

12.15

560.10

GJ

[

RCL

1 1

560.

10

+475.60

GJ

[RCL

12

1035.

70~39.

15

o

26.45

560.1 + 475.6

39.

15

Description:

Stores 475.6

into

register

1.

Stores 39.15 (the rightmost

number)

into

register

2.

Completes

the

calculation 475.60 /

39.15 . Recalls

the

contents

of

register

1.

Recalls

the

contents

of

register

2.

Completes

the

calculation.

The

[

STO

1

and

[

RCL

1 keys

can

also

be

used

with

variables. For example,

[STO I

.-

(in

the

MU%C

menu)

stores

the

rightmost

number

in

the

calculator

line

into

the

variable

M%C.

[

RCL

I

.-

copies

the

contents

of

M%C

into

the

calculator line.

40

2:

Arithmetic

Doing Arithmetic Inside Registers

The

HP-18C

lets you

do

arithmetic

on

numbers

in registers.

The

fol-

lowing

example stores 45.7

in

register 3, multiplies

that

number

by

2.5,

and

stores

the

result

back

in

register

3:

Keys:

Display:

45.7 1 STO

13

45.713

2.51sT0103

2.513

114.25

Description:

Stores 45.7

into

register

3. Stores 114.25

(45.7 x 2.5) into

register 3.

Displays

the

contents

of

register 3.

Table 2-1. Arithmetic in Registers

Keys

New

Number

in

Register

1

sTOI[B

old number + displayed number

ISTOI[J

old number - displayed number

1

STO

10

old number x displayed number

1

STO

IC±J

old number

-7-

displayed number

1

STO I.LJ

old number " displayed number

You

can

also

do

arithmetic

on

numbers

stored

in variables. For exam-

ple, 2 1

STO

10

..

(in

the

MU%C

menu)

multiplies

the

current

contents

of

M%C

by 2 and

stores

the

product

in

M%C.

2:

Arithmetic

41

The

MATH Menu Functions

Six

math

operations are available using

the

MATH menu.

To

display

the

MATH

menu,

press

..

in

the

MAIN menu. Except

for

" ,

these keys use

the

number

furthest

to

the

right

in

the

calculator line.

Table 2-2.

The

MATH Menu Keys

Menu

Key

Description

...

Common (base 10) logarithm

of

a positive number.

..

Common (base 10) antilogarithm; calculates

1O

x

.

...

Natural (base

e)

logarithm

of

a positive number.

IDiII

Natural antilogarithm; calculates eX.

IIDI

Factorial.

..

Displays

7r

(3.14159265359)

in

the current display format.

Starting from

the

MAIN menu:

Keys:

2.5

"

..

790

[B

4

IIDI

o

Display:

316.23

7913 . 1313

+24.1313

814.1313

42

2:

Arithmetic

Description:

Calculates 10

2

.5.

Calculates

the

factorial

of

4.

Completes

the

calcula tion.

Changing

the

Number

of

Displayed

Decimal

Places

To

change

the

number

of

displayed

decimal places:

1. Press I

OISP

1 to display

the

DISP

menu.

Figure 2·3. The DISP Menu

TO

SET

#DECIMAL

PLACES:

PRESS

{FIX)

OR

{ALL).

RADIX:

{.)

OR

{,)

1iDl1:iIm

__

2.

Do a or

b:

a.

To

specify

the

number

of

displayed

decimal places, press

_ . Type

the

number

of

decimal places (an integer from

o to 11)

and

press 1

INPUT

I.

b.

To

display

numbers

as precisely as possible (up to a maxi-

mum

of

12 digits), press

...

.

Changing

the

number

of

displayed

decimal places affects

what

you

see,

but

doesn't

affect

internal

calculations. Internally,

the

HP-18C

does calculations

with

12-digit numbers.*

Starting

with

two

displayed

decimal places:

Keys:

Display:

Description:

450·12560

Two

decimal places are

5.65

displayed.

IOlspl

_

Four decimal places

are

411NPUTI

5.65213

displayed.

IOlspl

...

5.652

Trailing zeros are dropped

.

IOlspl

",

2

Two

decimal places are

I

INPUT

1

5.65

displayed.

• An exception is values

of

PV,

PMT,

and

INT

used

in

amortization

calculations (refer to

Amortization

on

page

66), which are

rounded

to

the

display setting.

2:

Arithmetic

43

Interchanging

the

Period and

Comma

in

Numbers

To

change

the

decimal

point

and

digit separator:

1.

Press I OISP I to

display

the

DISP

menu

.

2.

Specify

the

decimal

point

by

pressing _

or

_ . _

sets a

period

as

the

decimal

point

and

comma

as

the

digit

sepa-

rator. For example,

the

number

one

million

is

displayed

as

1,000,000.00. _ sets a

comma

as

the

decimal

point

and

pe-

riod

as

the

digit

separator

. For example,

the

number

one

million

is

displayed

as 1.000.000,00.

Scientific

Notation

Scientific

notation

is useful

when

you

are

working

with

very large

or

very

small

numbers.

For example,

the

1984 Gross

National

Product

of

the

United

States

was

$3,662,800,000,000. Scientific

notation

writes

this

number

as a

smaller

number

(called a

mantissa)

times 10 raised to

a power. In this case,

the

decimal

point

is

moved

12 places to

the

left,

and

the

number

is

written

as 3.6628 x 10

12

.

The

same

process is

used

for very

small

numbers,

except

that

the

decimal

point

is

moved

to

the

right,

and

10 is raised to a

negative

power. For example,

0.00000752

can

be

written

as 7.52 X

10-

6

.

When

a calculation

produces

a result too large

or

too small for

the

HP

-18C to display,

the

number

is

automatically

displayed

in

scientific

notation,

using

a capital E

in

place

of

"x

IOU.

44

2:

Arithmetic

To

key in

numbers

in

scientific

notation

:

1.

Key in

the

mantissa

.

If

the

mantissa

is negative, use

~

to

change

the

sign.

2.

Press

either

the

alphabetic

[IJ

or

.[IJ to

start

the

exponent

.

3.

If

the

exponent

is negative, press 8 .

4.

Key

in

the

exponent.

Keys:

Display:

4.78

[IJ

13

GJ

8[IJ250

5.98E-13

2.36

~

.[IJ

8150120

-

2.83E-14

Description:

4.78 X

1013

-7-

8 X 10

25

equals 5.

98

X 10-

13

.

-2.36

X 10-

15

X 12 =

-2.83

x 10-

14

.

2: Arithmetic

45

3

General Business Calculations

Introduction

The

general

business (BUS)

menu

is

used

to solve

four

types

of

prob-

lems. Each

type

of

problem

has

its

own

menu

.

Percent

change

(

..

)

Percent

of

total

(

EIiiII!I

)

Markup

on

cost

(

mEl

)

Markup

on

price (

D!IIiI

)

The

difference

between

two

numbers,

expressed as

a

percentage

of

one

of

the

numbers.

The

portion

that

one

number

is

of

another, ex-

pressed

as a

percentage

.

The

difference

between

price

and

cost, expressed as

a

percentage

of

the

cost.

The

difference

between

price

and

cost, expressed as

a

percentage

of

the

price .

Percent Change

You

can

calculate

anyone

of

the

three

values if you

know

the

other

two.

The

percent

change

(%CH) is expressed as a

percentage

of

the

OLD number.

1.

To

display

the

%CHG (percent change)

menu

from

the

MAIN

menu,

press 1IlmII,

then

..

.

Figure 3·1. The %CHG Menu

1

°.

oo

. IIIDIIIIEImlIIDI

3:

General

Business

Calculations

47

2.

Store each

of

the

values you

know

by

keying

in

the

number

and

pressing

the

appropriate

menu

key.

3.

Press

the

menu

key for

the

value you

want

to calculate. The

an-

swer is displayed

in

the

calculator line.

Example: Calculating the percent change. Part 1. Total sales last

year were $110,000. This year, sales were $115,000.

What

is

the

per-

cent change between last year's sales

and

this year's?

Part

2.

What

would this year's sales

have

to

be

to

show

a 12% in-

crease from last year? Starting from

the

MAIN

menu:

Keys:

Display:

.,

CLEAR

ALL

I

0.00

110000

IIDIII

OLD=

110,000.00

115000

"

NE~~=115

,

000.00

IEmII

%CHANGE=4.55

Description:

Displays

the

%CHG

menu. Clears

the

history stack

and

the

%CHG variables.

Stores 110,000

in

OLD.

Stores 115,000

in

NEW.

Calculates

the

percent

change.

Part

2: OLD remains 110,000, so you

don't

have

to key it

in

again.

12 1Em11

..

:~CHANGE=

12.00

NEW=123,200.00

48

3:

General

Business

Calculations

Stores 12

in

%CH.

Calculates

the

value 12%

greater

than

110,000.

Percent

of

Total

You

can calculate

anyone

of

the

three

values

if

you

know

the

other

two .

1.

To

display

the

%

TOTL

(percent of total)

menu

from

the

MAIN

menu

, press

~

,

then

fImII

.

Figure 3-2. The %TOTL Menu

1

123.200.00

.

iEIliI!IGiliI"

2.

Store

each

of

the

values you

know

by

keying

in

the

number

and

pressing

the

appropriate

menu

key.

3.

Press

the

menu

key for

the

value you

want

to calculate.

The

an-

swer

is

displayed

on

the

calculator line.

Example: Calculating the percent of total. Part 1. Total assets for

Evett

Company

are $675,840 .

The

firm

has

inventories

of

$234,576.

What

percentage

of

total assets is inventory?

Part 2. Last year, Evett

Company

incurred salary expenses

that

were

45%

of

operating

expenses.

If

operating

expenses were $76 ,249,

what

were salary expenses? Starting

from

the

MAIN

menu:

Keys:

Display:

675840

11!1111

TOTAL=675,

840 . 00

Description:

Displays

the

%

TOTL

menu. Clears the history stack

and

the

%

TOTL

variables.

Stores $675,840 in TOTAL.

3:

General

Business

Calculations

49

234576

...

PART=234

..

576.00

Stores $234,576

in

PART.

--

~;TOTAL=34

.

71

Calculates

the

percent of

total.

Part

2:

.1

CLEAR ALL I

0.00

Clears

the

history stack

and

the

% TOTL variables.

45

__

%TOTAL=45.00

Stores 45

in % T.

76249 IIili1!I

TOTAL=76

..

249 . 00

Stores 76,249

in

TOTAL.

...

PART=34,312

.

05

Calculates 45%

of

the

total.

Markup

on Cost

You

can

calculate

any

of

the

three

values if

you

know

the

other

two.

1.

To

display

the

MU%C

(markup

on

cost)

menu

from

the

MAIN

menu,

press

.mill

,

then

1iIIIiI .

Figure 3-3. The MU%C Menu

1

34.312005

.1DiI~1IB

2.

Store

each

of

the

values you

know

by

keying

in

the

number

and

pressing

the

appropriate

menu

key.

3. Press

the

menu

key for

the

value you

want

to calculate. The

an-

swer

is

displayed

on

the

calculator line.

50

3:

General

Business

Calculations

Example: Markup on cost calculations. The

standa

rd

markup

on

blouses

at

Marcia 's Boutique is 60%. The

boutique

just received a

shipment

of

blouses costing $19.00

each. What

is

the

retail price

per

blouse?

Starting from the MAIN menu:

Keys:

• 1 CLEAR ALL 1

19 "

60

_

IiIEI

Display:

13.1313

COST=19.aa

~lARKUP%C=6a.

1313

PRICE=3a.4a

Markup

on

Price

Description:

Displays

the

MU%C

menu

.

Clears

the

history stack

and

the

MU%C variables.

Stores

the

cost.

Stores 60%

in

M%C.

Calculates

the

price.

You

can calculate

anyone

of

the

three values

if

you

know

the

other

two.

1.

To

display

the

MU%P (markup as a percent

of

price)

menu

from

the

MAIN menu, press

1IiD

,

then

1iI!EIiII

.

Figure 3-4. The MU%P Menu

2.

Store each

of

the

values you

know

by

keying

in

the

number

and

pressing

the

appropriate

menu

key.

3.

Press

the

menu

key for

the

value you

want

to calculate. The

an-

swer is displayed

in

the

calculator line.

3:

General

Business

Calculations

51

Example: Calculating the markup as a percent of price. Part

1.

Henderson's

Electronics purchases televisions for $225,

with

a discount of 4%. The televisions are sold for $300.

What

is

the

markup

as a percent

of

the

selling price?

Part

2.

What

is

the

markup

as percent

of

price

without

the

4% dis-

count?

Starting from

the

MAIN menu:

Keys:

• 1 CLEAR

ALL

I

225 G 4 00

IIiII

300

IDID

..

Display:

0,00

COST=

216,00

PRICE=

300,00

MARKUP%P=28,00

Part

2: Use $225 for

the

cost.

225

Qi1i1

..

COST=225,00

MARKUP%P=25,00

52

3:

General

Business

Calculations

Description:

Displays

the

MU%P

menu

.

Clears

the

history stack

and

the

MU%P variables.

Calculates

and

stores

the

net

cost.

Stores 300

in

PRICE.

Calculates

the

markup

as

a percent

of

price .

Stores 225

in

COST.

Calculates

the

markup

as

a percent

of

price.

Clearing

the

BUS Variables

Clearing variables sets

them

equal

to

O.

To

clear

the

variables

used

by

any

of

the

BUS

menus,

display

the

menu

and

press

.1

CLEAR

ALL

I.

For example, pressing

.1

CLEAR

ALL

I

while

in

the

%CHG

menu

clears OLD, NEW,

and

%CH. Clearing

COST

or

PRICE

in

the

MU%C

or

MU%P

menu

clears

the

value

in

both

menus.

All

the

variables

used

by

the

four

BUS

menus

are

cleared

when

you

press

.:aa to

display

the

BUS

menu.

Sharing Variables

Between

Menus

If

you

compare

the

MU%C

menu

and

the

MU%P

menus,

you'll

see

that

they

have

two

menu

labels

in

common-

1iJiI

and

1iIaBI

:

Figure 3-5. Shared Variables.

%CHG

%TOTL

MU%C

MU%P

I

COST

PRICE

M%C

COST

PRICE

M%P

Shared variables

The

HP

-18C keeps track of

the

values you

key

in

according to those

labels. For example, if you

key

in a COST

and

PRICE in

the

MU%C

menu,

exit to

the

BUS

menu,

and

then

display

the

MU%P

menu,

the

HP-18C

retains

those

values.

In

other

words,

the

variables

are

shared

between

the

two

menus.

3:

General

Business

Calculations

53

Example: Using shared variables. Part 1. Fredriksen's Food Co-

operative buys cases

of

canned

soup

with

an

invoice cost

of

$9.60

per

case.

If

Fredriksen's routinely uses a 15%

markup

on

cost, for

what

price

should

it sell a case

of

soup?

Part

2.

What

is

the

markup

on

price?

Starting

from

the

MAIN menu:

Keys:

• 1 CLEAR ALL I

9.60

BIll

15

__

IiIBII

Part

2:

1

EXITI

IDII

Display:

0 ,

00

COST=9,60

MARKUP:~C=

15,00

PRICE=11,04

MARKUP%P=13,04

54

3:

General

Business

Calculations

Description:

Displays

the

MU%C

menu

.

Clears

the

history stack

and

the

MU%C variables.

Stores 9.60

in

COST.

Stores 15%

in

M%C.

Calculates

the

retail price

per

case.

Exit

the

MU%C

menu

and

enter

the

MU%P

menu

.

Calculates

the

markup

as

a percent

of

price .

4

Time

Value

of

Money

Introduction

The

phrase

time value of money describes calculations

based

on

money

earning

interest

over a period

of time.

There

are two types

of

interest:

•

In

simple interest calculations,

the

amount

of

interest is a

percent

of

the

principal

and

is

repaid

in a

lump

sum. For example,

if

you

lend

a friend $500.00 for a

year

and

you

want

to

be

repaid

with

6%

simple interest

per

year,

your

friend owes you $500 +

WlOO

x

$500) = $530. Simple interest calculations

can

be

done

using

the

calculator line

and

the

00 key. Refer to

page

36 .

• Compound interest calculations take

into

account

that

interest,

added

to

the

principal

at

specified compounding

periods,

also

earns

interest.

Many

time value

of

money

problems-for

example, savings ac-

counts, mortgages,

pension

funds,

leases,

and

annuities-are

compound

interest calculations.

Amortization

calculations

deter-

mine

the

amounts

applied

toward

principal

and

interest

in

a

payment

or

series

of

payments.

4:

Time

Value

of

Money

55

The

TYM

Menu

The

time value of

money

(TVM)

menu

is

used

for certain

compound

interest calculations. Specifically, use

the

TVM

menu

when

there

is a

series

of

cash

flows (money received

or

money

paid) and:

•

The

dollar

amount

is

the

same

for

each

payment.*

•

The

cash flows occur

at

regular intervals.

•

Payments

coincide

with

the

compounding

periods.

To

display

the

TVM

menu,

starting

from

the

MAIN

menu,

press

IIIBII

,

then

...

.

Figure

4·1.

The

TVM

Menu

END

MODE

1

12 PMTS/YR:

0.00

C

EIIIRliII

..

IIiIDII

..-

fimJD

TVM

menu

'\.

Payment mode message Displays secondary

TVM

menu

The

primary

TVM

menu

has

five

menu

keys for built-in variables,

plus

1iIID3

.

The

IiIID3 key displays a

secondary

menu

used

to

change

the

payment

conditions

and

to display

the

amortization

(AMRT)

menu

.

The

message

on

the

display

informs

you

of

the

current

payment

con-

ditions

(payment

mode).

* For situations

where

the

amount

of

the

cash

flow varies, use

the

CFLO

menu.

56

4:

Time

Value

of

Money

Table

4·1.

TVM

Menu Keys

Menu

Key

..

Description

The

TVM

Menu

Stores or calculates the total number

of

payments (or com-

pounding periods). N can be expressed

in

any unit

of

time-

for example, years, months,

or

days:

Stores

or

calculates the annual percentage interest rate.

Stores or calculates the present value

of

the series

of

future

cash flows.

To

a lender or borrower,

PV

is the amount

of

the

loan; to

an

investor,

PV

is

the initial investment.

Stores or calculates the dollar amount

of

each periodic payment. The payments are the same amount, and no payments are skipped. Payments can occur at the beginning or end

of

each period. Stores or calculates the future

value-the

dollar amount

of

the final cash flow, or the compounded value

of

the series

of

previous cash flows.

FV

always occurs at the end

of

the last

period.

The

Secondary

TVM

Menu

Stores the number

of

payments per year. The value must be

an

integer

in

the range 1 through 999.

Sets

Begin mode; used when payments occur at the begin-

ning

of

each period.

Sets

End mode; used when payments occur at the end

of

each period.

Displays the AMRT (amortization) menu for calculating am-

ortization schedules .

• When the HP-18C calculates a non-integer

N,

the answer must be interpreted carefully . The built-in formulas used by the HP-18C do not calculate partial period payments. Interpreting a non-integer N is covered in the savings account example on pages 69 through

71

.

Calculations using a stored non-integer N produces a mathematically correct result, but this result has no simple useful interpretation. The example on pages 145 through 147 use the formula solver

to

do

an

"odd-period-at-the-beginning" calculation in which interest begins

to

accrue prior

to

the beginning

of

the first regular payment period.

4:

Time

Value

of

Money

57

Cash Flow Diagrams and Signs

of

Numbers

It

is

helpful

to illustrate TVM calculations

with

cash

flow

diagrams

.

Cash

flow

diagrams

are

time

lines

divided

into

equal

segments

of

time

called payment

periods

or

compounding

periods.

Arrows

show

the

cash

flows.

Money

received is a positive

number,

and

the

arrow

points up.

Money

paid

out

is a

negative

number,

and

the

arrow

points

down

.

Figure 4-2

shows

a typical TVM

cash

flow

diagram

.

Figure

4·2.

A Cash Flow

Diagram

Showing

Payments

at

the

End

of

Each Period

Money received

is

a

positive number

PMT

Equal payments

PMT PMT

PMT

Time

---.

r-----4------+----~------+_--~

Money paid out

is

a

negative number

Present Value

(PV)

2

3

4

5

Equal periods

FV

PMT

In figure 4-2,

the

payments

occur

at

the

end

of

each

period. Figure 4-3

shows

payments

occurring

at

the

beginning

of

each

period.

58

4:

Time

Value

of

Money

Figure

4-3_

A Cash Flow Diagram Showing Payments

at

the

Beginning

of

Each Period

PV

PMT

PMT PMT

5

Future value

(FV)

TVM

Calculations

The

following general instructions explain

how

to

use

the

TVM

menu

.

1. From

the

MAIN

menu,

press

..

'

then

lIB

to

display

the

TVM

menu.

2.

To

clear'

the

TVM variables, press

.1

CLEAR

ALL

I.

3.

Read

the

message

that

describes

the

number

of

payments

per

year

and

the

Begin/End

mode

.

If

you

must

change

either

of

these

settings, press

1!11113

.

•

To

change

the

number

of

payments

per

year,

key

in

the

new

value

and

press

1iilII

.

•

To

change

the

Begin/End

mode,

press

...

or

&:.

.

• Press 1

EXIT

1 to

return

to

the

primary

TVM

menu

.

4.

To

store

the

values you know,

key

in

the

number

and

press

the

appropriate

menu

key

.

5.

To

calculate a value, press

the

appropriate

menu

key.

4:

Time

Value

of

Money

59

Some

time value

of

money

calculations require

that

certain values

be

set to

O.

For example,

FV

must

be

set to 0

when

you are calculating

the

periodic

payment

(PMT) required to fully

pay

back

a loan. There

are two

ways

to set a value to

0:

• Before storing

any

values, press

.1

CLEAR ALL 1 to clear all

the

TVM

variables .

• Store

0;

for example, pressing 0

..

sets

FV

to

O.

Clearing

the

TVM

Variables

The

HP

-18C retains

the

values

stored

in

the

TVM

built-in

variables

until

they

are

changed

by

storing

or

calculating a

new

value,

or

cleared

by

pressing

.1

CLEAR ALL I. Clearing variables sets

them

equal

to O.

When

the

HP-18C

is

displaying

the

primary

TVM

menu,

pressing

.1

CLEAR ALL 1 clears N,

1%

YR,

PV,

PM!,

and

FV.

When

the

secondary

(OTHER)

menu

is displayed, pressing

.1

CLEAR ALL 1 sets

the

conditions

12 PMTS /YR:

END

MODE.

Loan Calculations

The

following

three

examples illustrate several

common

loan

calculations.

Example: A car loan. Part 1.

You

are financing

the

purchase

of a

new

car

with a 3-year

loan

at

10.5%

annual

interest,

compounded

monthly.

The

purchase

price

of

the

car is $7,250. Your

down

payment

is

$1,500.

What

are

your

monthly

payments?

(Assume

payments

start

one

month

after

purchase-in

other

words,

at

the

end

of

the

first

period

.)

60

4:

Time

Value

of

Money

Figure 4·4. A Car Loan

PV=7,250-1,500

I%YR= 10.5

N=

3x12

#PjY=12

1 35 1 36 1

PMT= ?

Part 2.

What

interest rate would you

have

to get to reduce your

monthly

payment

by

$10?

Starting from the

MAIN menu:

Keys:

.....

• 1

CLEAR

ALL

I

Display:

0.00

Description:

Displays

the

TVM

menu

.

Clears the history stack and

the

TVM variables.

These steps are necessary only if you

must

change

the

number

of

pe-

riods

per

year

and/or

the

Begin/End

mode.

• 1

CLEAR

ALL

I

12

PMTS/

YR:

END

MOD

E

Displays the secondary

TVM

menu

.

Sets 12

payments

per

year;

End

mode.

Displays

the

TVM

menu

.

4:

Time

Value

of

Money

61

3012

" N=36.£1£1

10

.5 _

I%YR=l£1.5£1

7250

G

1500

..

PV=5

..

75£1.

£1£1

PMT=-186.89

Stores

the

number

of

payments. Stores

the

annual

interest

rate.

Stores

the

amount

of

the

loan

.

Calculates

the

payment.

The

negative

value

means

this is

money

paid

out.

Part

2:

To

calculate

the

interest rate

that

reduces

the

payment

by

$10:

[B10

"

P~1T=-l

76.89

I%YR=6.75

Stores

the

reduced

pay-

ment

amount

.

Calculates

the

annual

in-

terest rate.

Example: A home mortgage. After careful

consideration

of

your

personal

finances,

you've

decided

that

the

maximum

monthly

mort-

gage

payment

you

can

afford

is $630.

You

can

make

a $12,000

down

payment,

and

annual

interest rates are currently 11.

5%.

If

you take

out a 30-year

mortgage,

what

is

the

maximum

purchase

price you

can

afford?

Figure

4·5.

A Home Mortgage

PV=?

PMT=630

I%YR=11 .5

N=30x

12

#P/Y=12

62

4:

Time

Value

of

Money

1

359

1

360

1

Starting from the MAIN menu:

Keys:

..

--

.1

CLEAR ALL 1

Display:

0 .

00

Description:

Displays the

TVM

menu

.

Clears

the

history stack

and

the

TVM

variables.

These steps are necessary only if you

must

change

the

number

of pe-

riods

per

year

and/or

the

Begin/End

mode.

IiiIII!B

Displays the secondary

TVM

menu

.

• 1 CLEAR ALL 1

30012

..

11

.5

IIBI

12

PMTS

/ YR:

END

t10DE

N=360.00

I%YR=11.50

630

~

..

PMT=-630. 00

IGII

PV=63,617.64

GJ

120000

75,617.64

Sets 12

payments

per

year;

End

mode.

Displays

the

TVM

menu.

Stores

the

number

of

payments

.

Stores the

annual

interest

rate . Stores

the

monthly

payment. Calculates

the

loan

amount

.

Calculates the total price of the house (loan plus down

payment).

4:

Time

Value

of

Money

63

Example: A mortgage with a balloon payment. You've

taken

out

a 25-year, $75,250

mortgage

at

13.8%

annual

interest.

You

anticipate

that

you will

own

the

house

for four years

and

then

sell it,

repaying

the

loan

in a "

balloon

payment

."

What

will

be

the

size

of

your

balloon

payment

at

the

end

of

four

years?

Figure

4·6.

A Home Mortgage With a Balloon Payment After

Four Years

PV= 75,250

PMT= ?

I%YR = 13.8

N= 4 x 12

#P/Y

= 12

The

problem

is

done

in

two steps:

1. Calculate

the

monthly

payment.

48

balloon

FV= ?

2. Calculate

the

balloon

payment

after

4 years.

Starting

from

the

MAIN

menu:

Keys:

...

--

.,

CLEAR ALL I

Display:

121.121121

64

4:

Time

Value

of

Money

Description:

Displays

the

TVM

menu

.

Clears

the

history stack

and

the

TVM

variables.

These steps are necessary only

if

you

must

change

the

number

of

pe-

riods

per

year

and/or

the

Begin/End

mode.

• , CLEAR ALL I

12

PMTS/lR:

END

MODE

Step

1.

Calculate PMT for

the

mortgage.

25012

II1II

N=300.00

13.8 I11III

I%YR=13,80

75250

..,.

P\}=75,250.00

PMT=-894.33

Displays

the

secondary

menu

.

Sets 12

payments

per

year,

End

mode.

Displays

the

TVM

menu.

Calculates

the

number

of

payments

in

25 years

and

stores

the

value

in

N.

Stores

the

annual

interest

rate. Stores

the

amount

of

the

loan. Calculates

the

monthly

payment.

Step

2.

Calculate

the

balloon

payment

after 4 years:

894.33

EZJ

Stores

the

rounded

value

...

PMT=-894.

33

of

PMT.*

4012

II1II

N=48,00

F\"'=-73,

408.81

Calculates

the

number

of

payments

in

4 years

and

stores

the

value

in

N.

Calculates

the

balloon

payment

after four years.

This

amount

plus

the

last

monthly

payment

repays

the

loan.

*

The

PMT

stored in

the

previous step is

the

12-digit

number

-894.330557971.

The

calcula-

tion

of

the

balloon

payment

must

use

the

actual

monthly

payment

amount-in

this

example,

the

rounded

number.

4:

Time

Value

of

Money

65

Amortization

The

IiIIiI

menu

is

used

to calculate

these

values for a single

loan

payment

or

a series

of

loan

payments:

•

The

balance

of

the

loan

after

the

payment(s)

are

made.

•

The

amount

of

the

payment(s)

applied

toward

interest.

•

The

amount

of

the

payment(s)

applied

toward

principal.

To

display

the

AMRT

menu,

starting

from

the

primary

TVM

menu:

1.

Press

1iIIDa

.

2.

Press

1iIIiI

.

Figure

4-7.

The

AMRT (Amortization) Menu

KEY

IN

IPAYMENTS

TO

AMORTIZEl

PRESS

{IP}

-73,408.1:11

~II:mJIIilmJDi1!IIIIICJ]iIiliII:H

Table 4-2 describes

the

AMRT

menu

keys.

Table

4-2.

AMRT menu keys.

Menu

Key

Description

..

Stores the number

of

payments

to

be amortized, and calculates the amortization schedule. The value entered must be an

integer

in

the range 1 through 1,200 .

...

Displays the amount

of

the payments applied toward interest.

..

Displays the amount

of

the payments applied toward

principal.

..

Displays the balance

of

the loan.

IIIDI

Calculates the amortization schedule for the next set

of

pay-

ments, using the stored value

of #P.

Di1DI

Prints an amortization table. (Refer

to

page 156 for additional

information.)

66

4:

Time

Value

of

Money

To

calculate

an

amortization

schedule,

starting

from

the

MAIN

menu:

1.

Press

""

then

_ to

display

the

primary

TVM

menu.

2.

Press

.1

CLEAR

ALL

1 to clear

N,

1%

YR,

PV,

PMT,

and

FV

to

O.

3.

Key

in

the

annual

interest

rate

and

press II1I£I.

4.

Key in

the

amount

of

the

loan

(the principal)

and

press

..

.

5.

Key in

the

amount

of

the

periodic

payment*

(using

EfJ

to

change

the

sign)

and

press

Ell

.

6.

Press

IiIDID

to

display

the

rest

of

the

TVM

menu.

7.

If

necessary,

change

the

number

of

payments

per

year

by

keying

in

the

value

and

pressing

..

.

8.

If

necessary,

change

the

Begin/End

mode

by

pressing "

or

..

.

9.

Press 1mID.

10.

Key

in

the

number

of

payments

to

be

amortized

and

press

..

.

The

HP-18C

displays

the

payments

amortized, the

bal-

ance

of

the

loan,

and

the

amount

applied

toward

interest.

11.

To

display

the

amount

applied

toward

the

principal,

press

..

.

12.

You

can

use

the

IIBIII

or

aD'ilII keys to

redisplay

those values

on

the

calculator line.

13.

To

continue

calculating

the

schedule

for

subsequent

payments,

do a or

b:

a.

Key

in

the

number

of

succeeding

payments

to

be

amortized

and

press

..

.

b.

Press

BIll

to

use

the

previously

stored

value for #P.

*

If

you

must

calculate

the

periodic

payment,

substitute

these instructions for steps 5

through

8,

above

:

1.

Key

in

the

total

number

of

payments

and

press

..

.

2.

Press

IiiIID

to

display

the

secondary

TVM

menu.

3.

If

you

must

change

the

number

of

payments

per

year, key in

the

value

and

press

...

.

4.

If

necessary.

change

the

Begin/End

mode

by pressing

IBID

or

_ .

5.

Press I

EXIT

I to

display

the

primary

TVM

menu.

6.

Press _ to calculate

the

payment.

7.

Press 1iiIID.

4:

Time

Value

of

Money

67

To

start

the

amortization

schedule

over

from

payment

#1,

press

.1

CLEAR ALL I

and

proceed

starting

at

step

#10.

Amortization

calculations

use

values

of

PV,

PMT,

and

INT

rounded

to

the

number

of decimal places specified

by

the

current

display

setting.

(All 12 digits

of

1%

YR

are

used

.) However,

the

stored

values of PV

and

PMT

do

not

change

.

Example: Amortization schedule for a home mortgage. Part 1.

To

purchase

your

new

home,

you

have

taken

out

a 30-year, $65,000

mortage

at

12.5%

annual

interest. Your

monthly

payment

is $693 .72.

Calculate

the

amount

of

the

first

year's

and

second

year's

payments

that

are

applied

toward

principal

and

interest.

Part

2.

Calculate

the

loan

balance

after

3lJ2

years.

Starting

from

the

MAIN

menu:

Keys:

..

-

.1

CLEAR ALL I

12.5 _

65000 "

693.72

~

...

IiIID

.1

CLEAR ALL I

Display:

0,00

I~:YR=12,

50

PV=65.,

000 , 00

PMT=-693,72

12

Pt1TS/YR:

END

t'10DE

68

4:

Time

Value

of

Money

Description:

Displays

the

TVM

menu

.

Clears

the

history stack

and

the

TVM

variables.

Stores

the

annual

interest

rate. Stores

the

amount

of

the

loan. Stores

the

monthly

payment. Displays

the

secondary

TVM

menu.

Sets 12

payments

per

year,

End

mode.

Displays

the

AMRT

menu.

12 "

PAYMENTS:

1-12

Calculates

the

amortiza-

BALANCE=64

.,

788,52

tion

schedule

for

the

first

INTEREST=-8

,

113,16

12

payments.

PRINCIPAL=-211,48

PAYMENTS:

13-24

BALANCE=64,549

,

03

INTEREST=-8,085

,1

5

PRINCIPAL=-239,49

Displays

the

amount

ap-

plied

toward

the

principal for

payments

1

through

12.

Calculates

the

amortiza-

tion

schedule

for

the

payments

.

Displays

the

amount

ap-

plied

toward

the

principal for

payments

13

through

24.

Part 2:

To

calculate

the

balance

after

31fz

years (42

payments),

amor-

tize 18

additional

payments

(42 - 24 = 18):

18 "

PAY~1ENTS:

25-42

BALANCE=64,129,05

INTEREST=

-12,066,98

Savings Calculations

Calculates

the

amortiza-

tion

schedule

for

the

months.

The

following examples illustrate two

common

savings calculations .

Example: A savings account.

You

deposit

$2,000

into

a savings ac-

count

that

pays

7.2%

annual

interest,

compounded

annually.

If

you

make

no

other

deposits

into

the

account,

how

long

will

it

take for

the

account

to

contain

$3,000?

4:

Time

Value

of

Money

69

Figure

4·8.

A Savings Account

PMT=O.OO

PV

=-

2,OOO

I%YR=7.2

N=?

#P/Y=1

Starting

from

the

MAIN

menu:

Keys:

..

--

.,

CLEAR

ALL

I

Display:

0.00

1

IIliIIIDII

1

PMTS/YR:

END

I

EXIT

I

7.2 _

2000~

..

3000 _

..

MODE

I

:~YR=7

.

20

PV=-2,000.00 FV=3,000.00

N=

5.83

70

4:

Time

Value

of

Money

FV=3,OOO

1

Description

Displays

the

TVM

menu

.

Clears

the

history stack

and

TVM

variables .

Displays

the

secondary

TVM

menu

.

Sets 1

payment

(period)

per

year,

End

mode.

Displays

the

TVM

menu.

Stores

the

annual

interest

rate. Stores

the

amount

of

the

deposit

.

Stores 3,000

in

FV.

Calculates

the

number

of

years .

Since

the

calculated value of N is

between 5 and

6,

it will

take

6 years

of

annual

compounding

to achieve a balance

of

at

least $3,000.

The

actual balance

at

the

end

of six years

can

be

calculated:

6

__

...

N=6.1313 F\}=3

..

1335.28

Stores 6 in N. Calculates

the

balance

af-

ter six years.

Example: An Individual

Retirement

Account (IRA).

You

opened

an

IRA

on

April 15, 1985,

with a deposit

of

$2,000. Thereafter, you

deposit

$80 .00

into

the

account

semimonthly. The

account

pays 8.3%

annual

interest,

compounded

semimonthly. How

much

money

will

the

account

contain

on

April 15, 2000?

Figure

4·9.

An IRA

t 2

j

PMT

=-

80

PV

=-

2,000

I%YR

= 8.3

#PjY

= 2 x 12

N=

15x12

x 2

360

FV

= ?

.I>-

-::.:

c.n

N

o o o

4:

Time

Value

of

Money

71

Starting

from

the

MAIN

menu:

Keys:

Display:

..

-

.1

CLEAR

ALL

I

0,00

I!IIID

2012

"

BIll

24

PMTS/VR :

~10DE

I

EXIT

I

1501202

..

N=360,00

8.3

1J1D

I\YR=8,30

2000~

11m

PV=-2,000,00

80~

"

P~1T=-80,

00

..

FV=63,963,84

72

4:

Time

Value

of

Money

Et~D

Description:

Displays

the

TVM

menu

.

Clears

the

history stack

and

the

TVM

variables.

Displays

the

secondary

TVM

menu.

Sets 24

payments

per

year,

End

mode

.

Displays

the

TVM

menu.

Calculates

the

number

of

deposits

and

stores

the

value

in

N.

Stores

the

annual

interest

rate.

Stores

the

initial deposit.

Stores

the

semimonthly

payment. Calculates

the

balance

in

the

IRA after 15 years.

Leasing Calculations

Two

common

leasing calculations are calculating

the

lease

payment

necessary to achieve a specified yield,

and

finding

the

present

value

(capitalized value)

of

a lease.

Example: Calculating a

lease

payment. A

new

car

valued

at

$13,500 is to

be

leased

for 3 years,

with

an

option

to

purchase

the

car

for $7,500

at

the

end

of

the

leasing

period. What

monthly

payments

,

payable

at

the

beginning

of

each

month,

are

necessary to yield

the

lessor 14%

annually?

Figure

4-10. A Car

Lease

I

1

I

rV

~

7'500

PMT= ?

3 34 35

36

I%YR=

14

PV

= - 13,500

N= 36

#PjY

= 12

Notice

that

the

first lease

payment

occurs

at

the

beginning

of

the

first

period. Starting

from

the

MAIN

menu

:

Keys:

...

-

.1

CLEAR

ALL

I

Display:

0.00

Description:

Displays

the

TVM

menu

.

Clears

the

history stack

and

the

TVM variables .

Displays

the

secondary

TVM

menu.

4:

Time

Value

of

Money

73

12

IiIDI

IDBI

I

EXIT

I

36 "

14

I11III

13500

[1J

..

7500 "

12

PMTS/YR

: BEGIN

~10DE

N=36,00

I:~YR=14,

00

PV=-13,500,00 FV=7,500,00

PMT=289,19

Sets 12

payments

per

year, Begin

mode

.

Displays

the

TVM

menu

.

Stores

the

number

of

payments

.

Stores

the

annual

interest

rate. Stores

the

present

value

of

the

car

in

pv.

Stores

the

purchase

op-

tion

value

in

FV.

Calculates

the

monthly

lease

payment.

Example: Present value of a lease with advanced payments and option to

buy.

Ratajak Dairy, Inc. is leasing a

machine

for 4

years.

Monthly

payments

are $2,400;

an

additional

$2,400

payment

at

the

beginning

of

the

leasing

period

replaces

the

final

payment.

The

leasing

agreement

includes

an

option

to

buy

the

machine

for $15,000

at

the

end

of

the

leasing

period. What

is

the

capitalized value

of

the

lease,

assuming

that

the

interest rate Ratajak

pays

to

borrow

funds

is

18%,

compounded

monthly?

74

4:

Time

Value

of

Money

Figure

4·11.

Present Value

of

a Lease With an Additional

Advanced Payment and an Option to Buy

at

the

End of

the

Leasing Period

PV

= ?

1%/YR=18

#P/Y=12

1

44

1

45

1

46

1 47 I

PMT=-2,400

FV=

- 15 ,

000

The

problem

is

done

in

four

steps

:

1. Calculate

the

present

value

of

the

47

monthly

payments

.

2.

Add

to this value

the

additional

advance

payment.

3.

Find

the

present

value

of

the

buy

option

.

4.

Sum

the

values calculated in

steps 2 and

3.

Starting

from

the

MAIN

menu

:

Keys:

......

.1

CLEAR ALL I

12

",

BIll

Display:

0,00

12 PMTS/YR: BEGIN

MODE

Description:

Displays

the

TVM

menu

.

Clears

the

history stack

and

the

TVM

variables.

Displays

the

secondary

TVM

menu

.

Sets 12

payments

per

year, Begin

mode.

Displays

the

TVM

menu.

4:

Time

Value

of

Money

75

Step

1:

Find

the

present

value

of

the

monthly

payments:

47

"

18 _

2400

@J

..

...

t~=47.00

P ;

'tR=18.00

PMT=-2,400.00 PV=81,735.58

Stores

the

number

of

payments. Stores

the

annual

interest

rate. Stores

the

monthly

payment.

Calculates

the

present

(capitalized) value of

the

47

monthly

payments

.

Step

2:

Add

the

additional

advance

payment

to

PY.

Store

the

answer.

G

2400

0

84

..

135.58

I STO

10

Calculates

the

present

value of all

the

payments. Stores 84,135.58

in

regis-

ter

O.

Step

3:

Find

the

present

value

of

the

buy

option

.

48

"

15000

@J

...

0"

...

t~=48.

00

F\}=-15,

000.00 PMT=0.00 P'.'=7

..

340.43

Step

4:

Add

the

results

of

step 3 and

4.

G I RCLI 0 0

91

..

476.00

76

4:

Time

Value

of

Money

Stores

the

number

of

periods. Stores

the

buy

option

.

Clears PMT. Calculates

the

present

value

of

the

buy

option.

Calculates

the

present

(capitalized) value of

the

lease.

Interest

Rate

Conversions

Th

e ICONV (interest conversion)

menu

converts

between

nominal

and

effective interest rates, using either

of

two

compounding

methods

:

• Periodic

compounding;

for example, quarterly, monthly,

or

daily

compounding

.

•

Continuous

compounding.

To

convert

between

nominal

and

effective interest rates,

starting

from

the

MAIN

menu

:

1.

Press

""

then

..

to

display

the

ICONV

menu

.

2.

Press

the

menu

key for

the

desired

compounding

method

(do a

or b):

a. Press

IIIBI

for periodic

compounding

.

b. Press

BIll

for

continuous

compounding.

3.

Key in

the

nominal

(or effective)

interest

rate

and

press

1mB

(or

IDD

).

4.

For periodic

compounding

only: Key

in

the

number

of

periods

per

year

and

press

..

.

5.

Press

IDD

(or

1mB

) to calculate

the

effective (or nominal)

interest rate.

Values

of

EFF%

and

NOM%

are

shared

between the

EFFCT

and

CO

NT

menus

. For example, if you calculate

an

effective interest rate in

CONT, t

hat

value

remains

stored in EFF% if

you

exit

the

CO

NT

menu

and

enter

the

EFFCT

menu.

4:

Time

Value

of

Money

77

Figure 4-12_ Shared Variables

TVM

ICONV CFLO

I

EFFCT

CO NT

I

NOM% EFF%

P

NOM% EFF%

t

Shared var iables

t

Clearing

the

ICONV Variables

NOM%,

EFF%,

and

P are cleared

when

you

enter

the

ICONV

menu

.

Pressing

.1

CLEAR

ALL

I in

the

EFFCT

or

CONT

menus

clears

NOM%

and

EFF%. In

the

EFFCT

menu,

P is also cleared .

Example: Converting from a nominal to an

effective

interest

rate.

You

are considering

opening

a savings

account

in

one

of

three

banks. Which

bank

has

the

most

favorable interest rate?

Bank

#1

6.7%

annual

interest,

compounded

quarterly

Bank

#2

6.65%

annual

interest,

compounded

monthly

Bank

#3

6.65%

annual

interest,

compounded

continuously

78

4:

Time

Value

of

Money

Starting

from

the

MAIN

menu:

Keys:

Display:

.,

CLEAR

ALL

I

0.00

6 . 7

III'iIi3II

NOM%=6.70

4_

P=4.00

EFF%=6 .

87

6

.65

III'iIi3II

NOW·:=6.65

12 _

P=12.00

EFF%=6 .

86

EFF:·:=6 .

88

Description:

Displays

the

ICONV

menu. Displays

the

EFFCT

menu. Clears

the

history stack

and

EFFCT

variables.

Stores

the

nominal

an-

nual

interest rate for

bank

#1.

Stores

the

number

of

compounding

periods

per

year.

Calculates

the

effective

interest rate for

bank

#1.

Stores

the

nominal

an-

nual

interest

rate

for

bank

#2

.

Stores

the

number

of

compounding

periods

per

year.

Calculates

the

effective

interest

rate

for

bank

#2.

Displays

the

CONT

menu.

The

previous val-

ues

of

NOM%

and

EFF%

are retained. Calculates

the

effective

rate for

bank

#3.

The

calculations

show

that

bank

#3

is offering

the

most

favorable in-

terest rate .

4:

Time

Value

of

Money

79

5

Cash Flow Calculations

Introduction

The

cash

flow (CFLO)

menu

is

used

to analyze

cash

flows

(money

received

or

money

paid

out)

of

uneven

amounts

that

occur

at

regular

intervals.*

Once

you've

entered

the

cash

flows, you

can

calculate:

•

The

total

of

the

cash

flows.

•

The

internal

rate

of

return

(IRR%).

•

The

net

present

value (NPV),

net

uniform

series (NUS),

and

net

future

value (NFV) for a specified periodic interest

rate

(1%).

The CFLO Menu

To

display

the

cash

flow (CFLO)

menu,

starting

from

the

MAIN

menu,

press

...

'

then

mB

.

If

you

haven't

previously

used

the

CFLO

menu,

the

HP-18C

displays

an

empty

cash

flow

number

list.

Figure 5·1.

An

Empty CFLO Number List

INITIAL

FLOW

Q

.INIT=

0.00

Li~~mmJCIiImIml

*

You

can use

the

cash flow

menu

for cash flows

of

equal

amounts

at

regular intervals.

How

-

ever, these situations are

handled

more

easily in

the

TVM

menu.

5:

Cash

Flow

Calculations

81

The

menu

labels

show

the

operations

you

can

perform

on

the

number

list. Table 5-1 briefly describes these operations.

Table 5-1. CFLO Menu Keys

Menu

Key

Description

...

Displays the CALC menu for calculating the total, IRR%,

NPV,

NUS, and

NFV.

1IIIiI

'

Used

to

insert cash flows into the list .

mDiI

'

Used

to

delete cash flows from the list .

..

'

Used

to

name the list.

..

'

Used

to

switch from one list

to

another or

to

create a new

list .

• Covered

in

chapter

7.

If

you

have

previously

used

the

CFLO

menu,

your display will look

different.

Instead

of

displaying

an

empty

list,

the

HP-18C

displays

the

beginning

of

the

CFLO

number

list you

worked

with

most

recently.

You

can

press

[I]

to see

more

of

the

list.

To

display

an

empty

list,

YQu

can:

• Clear

the

list

by

pressing

.1

CLEAR ALL I. Clearing

number

lists is

covered

in

more

detail

on

page

114 .

• Create a

new

list

by

pressing

..

'

then

liliiii.

Creating

new

number

lists is covered

in

more

detail

on

pages 112

and

113.

The

maximum

number

of cash flows you

can

store

depends

on

the

amount

of

unused

calculator memory.

When

calculator

memory

is

otherwise empty, you

can

store approximately 100 cash flows (simple

or grouped).

82

5:

Cash

Flow

Calculations

Figure

5·2.

A CFLO

Number

List With Numbers Already In

It

D

'ltFLOW(1)=5,000.00

#TIMES=l~d~--------~--------~

1.00

mH[IDiii]mm:Jc:mm1!lDl

List pointer Group number The number

of

consecutive times this dollar amount occurs.

The dollar amount

of

each cash

flow

in the group.

______

...1

Using

Number

Lists

You

can

think

of a number

list

both

as a collection

of

numbers,

and

as

a location in calculator

memory

where

the

numbers

are stored.*

The

HP

-18C

has

a variety

of

features to

help

you use

number

lists

effectively.

Some

of

these

features are

covered

in

this

chapter

and

demonstrated

in

the

examples.

The

rest

of

the

features

are

explained

in

chapter

7.

Cash Flow Diagrams and Signs

of

Numbers

The

sign

conventions

used

for

cash

flow calculations are

the

same

as

those

used

in

time

value

of

money

calculations. Figure 5-3 illustrates a

typical series

of

cash

flows. Situations of this type,

where

there

are

no

consecutive,

equal

cash

flows, are called simple

cash

flows

.

*

The

HP-18C can store two types

of

number

lists-SUM

and

CFLO.

5:

Cash

Flow

Calculations

83

Figure

5·3.

Simple Cash Flows

Money received is a positive numbe r 200

300

200

250

'*

Time

~

r---~--~~--~---4----4---~----+---~

""

Money paid out

is

a

negati

ve

number

Equal per

io

ds

Initial

flow=

-700

The

horizontal

line

represents

time.

The

line

is

divided

into

equal

compounding

periods.

The

vertical lines

represent

the

cash

flows. For

money

received,

the

line

points

up; for

money

paid

out,

the

line

points

down

. In this case,

the

investor

has

invested

$700,

and

this

investment

has

generated

a series of

cash

flows,

starting

at

the

end

of

the

first period. Notice

that

there

is

no

cash

flow (a

cash

flow of 0) for

period five,

and

that

the

investor

pays

a

small

amount

in

period

six.

Figure 5-4 illustrates a

cash

flow

diagram

in

which

two series

of

con-

secutive,

equal

cash

flows occur. Consecutive,

equal

cash

flows are

called

grouped

cash

flows

.

Figure 5·4. Grouped Cash Flows

Initial

Flow(1)= - 100

# Times (Number

of

times)= 5

flow=

- 100

-100

- 100

-100 -100

84

5:

Cash

Flow

Calculations

Flow(3) = 1 ,950

6

Flow(2)= - 200

# Times= 3

7 8

- 200

-20

0 - 200

9

After

an

initial

payment

of

$100,

the

investor

pays

$100

at

the

end

of

periods 1 through

5,

and

$200

at

the

end

of

periods 6 through

8.

The

investment

returns

$1,950

at

the

end

of

period

9.

Entering Cash Flows

The

list

pointer

(.)

shows

you

where

the

you

enter

is

placed. When

the

list is empty,

the

pointer

points

to

the

initial flow.

To

enter

cash

flows

into

the

CFLO

number

list:

1.

Make

sure

your

cash

flows

are

occurring

at

regular

intervals

and

at

the

end

of

each

period

(see figure 5-3).

If

one

or

more

periods

are

skipped,

set

their

cash

flows

equal

to

O.

If

consecutive,

equal

cash

flows occur,

you

can

group

them

to

make

entering

the

data

easier (see figure 5-4).

2.

Key

in

the

value

of

the

initial

cash

flow

(remember

the

sign con-

ventions

-u

se

@J,

if necessary, to

change

the

sign)

and

press

I INPUT

I.

3.

The

pointer

now

points

to FLOW(l). Key

in

the

value for

FLOW(l)

and

press

I INPUT I.

4.

The

pointer

now

points

to

#TIMES-the

number

of

consecutive

occurrences

of

FLOW(l)

. #TIMES

has

been

automatically

set

to

1,

and

1.00 is

displayed

on

the

calculator

line

as a

typing

aid.

Do

a

or

b:

a.

To

retain

the

value 1,

press

I INPUT 1

.*

b.

To

change

#TIMES, key

in

the

number

and

press

I INPUT

I.t

Figure 5-5. Entering

#TIMES

I

FLOW(1)=5,000.00

.iT I MES= 1 .....

------------;-

Temporary #TIMES

Q

1.00

mDlmmDmDilcmmll!lDl

Typing aid

• Pressing

CD

to

move

the

list

pointer

to

the

next cash flow also retains

the

value 1.

tTh

e maximum value for #TIMES is 999.

5:

Cash

Flow

Calculations

85

5.

Continue

entering values.

The

HP-18C

recognizes

the

end

of

the

list

when

a flow is left

blank

(no value is entered).

Viewing and Editing

the

List

The

[!]

and

ITJ

keys

move

the

list

pointer

up

and

down

the

list

one

number

at

a time.

[!]

and

ITJ

move

the

pointer

to

the

beginning

and

end

of

the

list.

To

change

an

incorrect

number

after it's

been

entered

into

the

number

list:

1. Position

the

pointer

at

the

incorrect value.

2.

Key

in

the

correct value

and

press I INPUT

I.

To

add a cash

flow to

the

bottom

of

the

list,

move

the

pointer

to

the

bottom

of

the

list (press

C[}]

)

and

enter

the

value

and

#TIMES.

If

you leave

out a cash

flow, you

can

insert

it

at

its

proper

place.

You

can

also delete a

cash

flow.

Inserting

and

deleting

numbers

is covered

in

chapter

7.

Cash Flow Calculations

Press

lIB

to

display

the

CALC

menu.

Table 5-2 describes

the

cal-

culations you

can

do

.

•

To

calculate

the

sum

of

the

cash

flows,

press

1IiI1!I

.

•

To

calculate

the

internal

rate

of

return,

press

1Jm

.*

The

HP-18C

calculates

the

periodic

rate

of

return.

To

calculate

the

annual

return,

multiply

the

periodic rate

by

the

number

of

periods

per

year

.

*

The

calculations for

internal

rate of

return

are complex

and

may

take a relatively long time.

To

halt

the

calculation, press

any

key. In certain cases,

the

HP-18C

displays a message

indicating

that

the

calculation

cannot

continue

without

further

information

from you,

or

that

there is

no

solution. Refer to

Appendix

B for

additional

information

about

calculating

lRR%.

86

5:

Cash

Flow

Calculations

• To

calculate

net

present

value

(

111&

),

net

uniform

series (

lIB

),

and/or

net

future

value ( ..

):

1.

Key

in

the

periodic

interest

rate,

expressed

as a

percentage,

and

press

..

.

2.

Press

the

menu

key(s)

for

the

calculation(s)

you

want

to do.

Table 5-2. The CALC Menu for CFLO Lists

Menu

Key

Description

IDi1I

Calculates the sum

of

the cash flows .

...

Calculates the internal rate

of

return~the

interest (discount)

rate at which the net present value

of

the cash flows equals

O.

For conventional investments', the investment is attractive

if IRR% is greater than the cost

of

capital.

..

Stores the

periodic

interest rate, expressed as a percentage

(sometimes called

cost

of

capital, discount rate,

or

required

rate

of

return).

111&

Calculates the net present

value-the

present value

of

a se-

ries

of

cash flows plus the initial cost

of

the investment,

computed for a specified periodic interest rate.

lIB

Calculates the net uniform

series-the

dollar amount

of

regu-

lar, equal cash flows having a present value equivalent

to

the

net present value .

..

Calculates the net future value

of

a series

of

cash flows, cal-

culated by finding the future value

of

the net present value .

• Conventional investments meet four

criteria-(1)

the initial cash flow

is

negative, (2) some

flows following the initial flow are positive, (3) the sequence

of

cash flows changes sign only

once, and (4) the sum (TOTAL)

of

the cash flows

is

positive.

5:

Cash

Flow

Calculations

87

Example: Calculating IRR% and NPV of an investment.

Part

1.

An

investor

makes

an

initial

investment

of

$80,000,

and

expects re-

turns

over

the

next five years as

illustrated

in

figure 5-6.

Figure 5-6. Cash Flows for an Investment

115,000

5,000

4,500

5,500

2 3 4

5

Initial

flow= -80,000

Calculate

the

total

of

the

cash

flows

and

the

internal

rate

of

return

of

the

investment.

In

addition,

calculate

the

net

present

value

and

net

future

value,

assuming

an

annual

interest

rate

of

10.5%.

Part

2.

Assuming

the

same

interest rate, calculate

NPV

if

cash

flow

#4

is

reduced

from $4,000 to $1,000.

Starting

from

the

MAIN

menu:

Keys:

_IDIII

*

• 1 CLEAR ALL I

..

80000

@JIINPuTI

Display:

HlITIAL

FLO~~

•

IN

IT=

HlI

T=-8e.,

€lee,

€Ie

.FLO~H

1)

=

#T

I t1ES=

Description:

Displays

the

cash

flow

menu

.

Clears

the

list.

Enters

the

initial cash

flow.

•

If

you

want

to

preserve

the

current

number

list, skip

the

(pressing

.1

CLEAR

ALL

I

).

Instead,

name

the

list (refer to

pag

e 111) , a

nd

then

press "

IIIB.

88

5:

Cash

Flow

Calculations

5000

II

NPUT

I

FLO~H

1 )

=5,000,00

Enters FLOW(l).

.#TIMES=l

I

INPUT

I

.FLOW(2)=

Enters 1 as

the

#TIMES

#TIMES= for FLOW(l).

4500 I

INPUT

I

FLOW(2)=4,500,00

Enlers FLOW(2).

.#TIMES=l

I

INPUT

I

.FLOW(3)=

Enters #TIMES for

#TIMES= FLOW(2).

5500

II

NPUT

I

Enters FLOW(3).

I

INPUT

I

FLOW(3)=5,500,00

.#TIMES=l .FLOW(4

) =

n I

~lES=

4000

II

NPUT

I

FLOW(4)=4,000,00

Enters FLOW(4).

.n

I

MES=

1

.FLOW(5)=

#TIMES=

115000

Enters FLOW(5).

I

INPUT

II

INPUT

I

FLOW(5 ) =

115,000,00

.#TIMES=l .FLOW(6

) =

#TIMES=

....

Displays

the

CALC

menu

.

..

TOTAL=54,000,00

Calculates

the

sum

of

the

cash

flows.

..

I

RR%=

11 ,

93

Calculates the

internal

rate

of

return

.

10.5

.-

I:~=10,50

Stores

the

periodic inter-

est rate.

BIll

NPV=4.,

774,63

Calculates

the

NPY.

..

NFV=7 ,

865,95

Calculates

the

NFY.

5:

Cash

Flow

Calculations

89

Part 2.

Calculate

NPV

at

an

interest

rate

of 10.

5%

if

cash

flow

#4

is

reduced

to

$1,000

.

I

EXIT

I

•

FLOW(6)=

Displa

ys

the

number

list .

#T

I

~1ES=

[!][!][!][!]

.FLOW(4)=4.000

.

00

Moves

the

number

list

#TH1ES=1

pointer

to

cash

flow

#4.

1000 I INPUT I

FLOw(4)=1

..

000.00

Changes

cash

flow

#4

to

•

#TIMES=l

$1,000

.

Ii1DI

Displays

the

CALC

menu.

BIll

NP'.}=2.762.43

Calculates

NPV

for

the

edited

list.

Example:

An

investment with grouped cash flows. You

are

con-

sidering

an

investment

that

requires a cash

outlay

of

$50,000,

with

the

promise

of

annual

cash

flows

as

shown

in

figure

5-7

:

Figure 5·7.

An

Investment With Grouped Cash Flows

Initial

flow

=

-

50,000

FLOW(1)

0 0

0

0 0 0

0

0 0

FLOW(2)

90

5:

Cash

Flow

Calculations

(J1 (J1

0

0 0

0

0 0

a

FLOW(3)

FLOW(4)

(J1

0 0 0

Calculate IRR%. Also,

find

NPV

at

an

annual

interest rate

of

9%.

First, organize

the

data:

Group

Number

Amount

Number

of

Times

Initial

-50,000

-

1

5,000

3

2

10,000 4

3 0

1

4

15,000

3

Starting

from

the

MAIN

menu:

Keys:

_1IIBiI

*

• 1 CLEAR

ALL

1

..

50000

~

1 INPUT 1

5000 1 INPUT 1 3

1 INPUT 1

10000 1 INPUT

14

1 INPUT 1

Display:

INITIAL

FLO~l

.nUT=

INIT=-50,

000,00

.FLOW(l)=

#T

IMES=

FLOW( 1

)=5,

000.

0tl

.#T

I

~IE:;=3

.FLm~(2)=

#TH1ES=

FLOW(2)=10.000.00

.#TI

MES=4

.FLm~(3)=

#TI~IE~;=

Description:

Displays

the

CFLO

menu

.

Clears

the

number

list.

Enters

the

initial

cash

flow.

Enters FLOW(l).

Enters FLOW(2).

*

If

you

want

to

preserve

the

current

number

list, skip

the

(pressing

.1

CLEAR

ALL

b.

Instead,

name

the

list (refer to

page

111),

and

then

press

EiilIIiIIDI

.

5:

Cash

Flow

Calculations

91

o I INPUT I

Enters

FLOW(3)

I INPUT I

.FLm·l(3)=

#T

I t1ES=

15000 I INPUT

13

Enters

FLOW(4).

I INPUT 1

FLO~1(4)=15,

000

.#TIMES=3

.FLOW(5)=

#T

It1ES=

mEl

Displays

the

CALC

menu

.

11m

I RR::';=

11

.30

Calculates

IRR%.

9_

1\=9.00

Stores

the

periodic

(an-

nual)

interest

rate.

...

NP\}=6

..

728.63

Calculates

NPV.

Example:

An

investment with quarterly returns. You

have

been

offered

an

opportunity

to

invest

$20,000.

The

investment

returns

quarterly

payments

over

four

years

as

follows:

Year 1 4

payments

of

$500

Year 2 4

payments

of

$1,000

Year 3 4

payments

of

$2,000

Year 4 4

payments

of

$3,000

Figure 5·8.

An

Investment With Quarterly Returns

'" '"

'"

0

'0

0

'0

0 0

'0 '0 '0

'0

0 0 0

0

0 0

0

0 0 0

Initial

flow= - 20,000

92

5:

Cash

Flow

Calculations

w

0

'0

0

0 0 0

Calculate

the

annual

rate

of

return

for this

investment.

Starting

from

the

MAIN

menu:

Keys:

"'IDIDI

*

.1

CLEAR

ALL

J

..

Display:

Itn

T I

AL

FLOW

•

Itn

T=

Description:

Displays

the

CFLO

menu.

Clears

the

number

list.

20000

tzJ

!INPUT J

Itn

T=-20., 00(1,00

Enters

the

initial

cash

flow.

500 !INPUT J 4!INPUT

J

1000 !

INPUT

J 4!INPUTJ 2000

II

NPUT

J 411NPUT

J 3000 !INPUT J 4!INPUTJ

.FLOW<:!)=

#T

II'lES=

FLO~J

<:

! )

=5(1(

1,

(10

.#TIMES=4

.FLOw(

2)

=

#TIMES=

.FLOW<:5 ) =

#T

II'lES=

I

1<:1':\=2,43

9.72

Enters FLOW(l).

Enters FLOW(2), FLOW(3)

and

FLOW(4).

Calculates

the

periodic

rate

of

return.

Calculates

the

nominal

annual

rate of

return

.

*

If

you

want

to

preser

ve

the

current

number

list, skip

the

(pressing . CLEAR ALL

Instead,

name th

e list (refer to

pag

e 111),

and

then press

..

1iIDiDI

.

5:

Cash

Flow

Calculations

93

Running Total and Statistics Calculations

Introduction

6

The

SUM

menu

is

used

to calculate

the

running

total

of

a list

of

num-

bers

and

to

do

statistical calculations. As you

enter

the

numbers,

the

HP

-18C displays

the

running

total.

Once

the

list

of

numbers

has

been

entered, you can:

• Calculate

the

mean,

median,

standard

deviation,

and/or

range

(largest

number

minus

the

smallest

number).

• Display

the

largest (maximum)

and

smallest

(minimum)

number

in

the

list.

•

Sort

the

list from smallest

number

to largest

number.

• Do

curve-fitting

and

forecasting calculations

using

two

SUM

lists

and

one

of

four

models-linear,

exponential, logarithmic,

and

power. (Curve

fitting for

the

linear

model

is called

linear

regression.)

The SUM Menu

To

display

the

SUM

menu,

press

..

in

the

MAIN

menu.

If

you

haven't

previously

used

the

SUM

menu,

the

HP-18C

displays

an

empty

SUM

number

list.

6:

Running

Total

and

Statistics

Calculations

95

Figure 6-1.

An

Empty SUM Number List

~

I.ITEM(

1)=

.

m~~.lMu~:8~ii!!!'rnll]~iiI~'#i!!'!!I~:m!M;~1:II1!'!ij~#i!!.!'::~=:::j-

SUM

menu

Q

II

TOTAL=13.

1313

Running

total

List

pointer

The

menu

labels

show

the

operations

you

can

perform

on

your

SUM

number

list. Table 6-1 briefly describes

these

operations.

Table 6-1. SUM Menu Keys

Menu

Key

Description

B1B

Displays

the CALC

menu,

which

is

used

to

do

statistical

calculations.

1ImIII

'

Used

to

insert numbers

into

the

list.

IDBII'

Used

to

delete numbers

from

the

list

.

...

.

Used

to

name the

list.

...

.

Used

to

switch

from

one

list

to

another or

to

create a

new

list.

• Covered

in

chapter 7.

If

you

have

previously

used

the

SUM

menu,

your

display

will look

different. Instead

of

displaying

an

empty

list,

the

HP-18C

displays

the

SUM

list you

worked

with

most

recently.

You

can

press [TI to see

more

of

the

list.

To

display

an

empty

list, you can:

• Clear

the

list

by

pressing

.1

CLEAR

ALL

I. Clearing

number

lists is

covered in

more

detail

on

page

114 .

•

Create a new

list

by

pressing

...

'

then

IIJ!DI.

Creating

new

number

lists is

covered

in

more

detail

on

pages

112

and

113 .

96

6:

Running

Total

and

Statistics

Calculations

Figure

6·2.

A SUM Number List With Numbers Already In

It

.---=-==,....,...,,.....,,.,

.....

----------

Item

number

I ITEM(1)=267.82

~

.ITEM(2)=837.23

~

TOTAL=1'105.05

mBIm:DilmDcmml!lD

Running

total

List

pointer

Using

Number

Lists

You

can

think

of a

number

list

both

as a collection

of

numbers

and

as

a location

in

calculator

memory

where

the

numbers

are stored. *

The

HP-18C

has

a variety

of

features to

help

you

use

number

lists

effectively.

Some

of

these features are covered in this

chapter

and

demonstrated

in

the

examples.

The

rest of

the

features are

covered

in

chapter

7.

Entering

Numbers

and

Viewing

the

Running

Total

The

list

pointer

(.)

shows

you

where

the

you

enter

is

placed.

When

the

list is empty,

the

pointer

points

to ITEM(l)

and

the

TOTAL=O .OO.

To

enter

numbers

into

the

empty

list:

1. Key

in

the

first

number;

it

is

displayed

on

the

calculator line.

If

necessary, press

@J

to

change

the

sign.

2.

Press I INPUT I to

enter

the

number

as ITEM(l) . Line 3 displays

the

updated

running

total,

and

the

list

pointer

now

points

to

ITEM(2).

* The HP -18C can store two types

of

numb

er lists -

SUM

and

CFLO.

6:

Running

Total

and

Statistics

Calculations

97

Figure

6·3.

SUM List After Entering One Number

ITEM(1)=267.82 .ITEM(2)= TOTAL=267.82

mDln:::mDlm:iIcmmli!lD

3.

To

enter

ITEM(2), key in

the

value

and

press I INPUT I.

The

up-

dated

running

total is

displayed

on

the

calculator line,

and

the

list

pointer

now

points

to ITEM(3).

Figure

6·4.

SUM List

After

Entering Two Numbers.

ITEM(2)=837.23 .ITEM(3)=

TOTAL=1,105.05

mDln:::mDlm:iIcmmli!lD

4.

Continue

entering

values for ITEM(3), ITEM(4), etc.

The

HP-18C

recognizes

the

end

of

the

list

when

an

item

is left

blank

(no

value is entered).

Viewing

and Editing

the

List

The

m

and

CD

keys

move

the

list

pointer

up

and

down

the

list

one

number

at a time

. • m

and.CD

move

the

pointer

to

the

beginning

and

end

of

the

list. Moving

the

list

pointer

does

not

affect

the

value

of

the

running

total.

To

change

an

incorrect

number

after

it

has

been

entered

into

the

number

list:

1.

Position

the

list

pointer

at

the

incorrect value .

2.

Key

in

the

correct value

and

press I INPUT

I.

The

correct value is

e

nter

ed

into

the

list,

and

the

updated

running

total is

displayed

.

To

add a number

to

the

bottom

of

the

list,

move

the

pointer

to

the

bottom

of

the

list (press .

CD)

and

enter

the

new

value .

Inserting

and

deleting

numbers

are

covered

in

chapter

7.

98

6:

Running

Total

and

Statistics

Calculations