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20070201
• A deposit is indicated by a plus sign (+), while a withdrawal is indicated by a minus sign (–).
u Converting between the nominal interest rate and effective interest rate
The nominal interest rate ( I% value input by user) is converted to an effective interest
rate ( I %' ) when the number of installments per year ( P/Y) is different from the number of
compound interest calculation periods ( C/Y). This conversion is required for installment
savings accounts, loan repayments, etc.
P/Y : installment
periods per year
C/Y : compounding
periods per year
When calculating
n , PV, PMT, FV
The following calculation is performed after conversion from the nominal interest rate to the
effective interest rate, and the result is used for all subsequent calculations.
When calculating
I %
After
I% is obtained, the following calculation is performed to convert to I%'.
P/Y : installment
periods per year
C/Y : compounding
periods per year
The value of
I%' is returned as the result of the I% calculation.
FV =– (PMT × n + PV )FV =– (PMT × n + PV )
n
PMT =–
PV + FV
n
PMT =–
PV + FV
PMT
n =–
PV + FV
PMT
n =–
PV + FV
I%' =
I%
(1+ ) –1
[C / Y ]
[P / Y ]
100 × [C / Y ]
{ }
× 100
I%' =
I%
(1+ ) –1
[C / Y ]
[P / Y ]
100 × [C / Y ]
{ }
× 100
i = I%'÷100i = I%'÷100
I%' =
I%
(1+ ) –1
[C / Y ]
[P / Y ]
100
{ }
×[C / Y ]× 100
I%' =
I%
(1+ ) –1
[C / Y ]
[P / Y ]
100
{ }
×[C / Y ]× 100
7-3-2
Compound Interest