HP 0012C-90001 User manual

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hp 12c financial calculator
user's guide
H
Edition 5
HP Part Number 0012C-90001

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Notice
NoticeNotice
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THIS ANUAL AND ANY EXA PLES CONTAINED HEREIN ARE PROVIDED “AS
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THIS ANUAL AND ANY EXA PLES CONTAINED HEREIN ARE PROVIDED “AS
IS” AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. HEWLETT
IS” AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. HEWLETTIS” AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. HEWLETT
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--
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CONTAINED HEREIN.
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CONTAINED HEREIN.
Copyright © 2008 Hewlett-Packard Development Company, L.P.
Reproduction, adaptation, or translation of this manual is prohibited without prior
written permission of Hewlett-Packard Company, except as allowed under the
copyright laws.
Hewlett-Packard Company
16399 West Bernardo Drive
S 8-600
San Diego, CA 92127-1899
USA
Printing History
Edition 5 April 2008

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Introduction
IntroductionIntroduction
Introduction
About This
About ThisAbout This
About This Handbook
HandbookHandbook
Handbook
This hp 12c user's guide is intended to help you get the most out of your
investment in your hp 12c Programmable Financial Calculator. Although the
excitement of acquiring this powerful financial tool may prompt you to set this
handbook aside and immediately begin “pressing buttons,” in the long run you’ll
profit by reading through this handbook and working through the examples it
contains.
Following this introduction is a brief section called aking Financial Calculations
Easy—which shows you that your hp 12c does just that! The remainder of this
handbook is organized basically into three parts:
 Part I (sections 1 through 7) describes how to use the various financial,
mathematics, statistics, and other functions (except for programming)
provided in the calculator:
Section 1 is about Getting Started. It tells you how to use the keyboard, how
to do simple arithmetic calculations and chain calculations, and how to
use the storage registers (“memories”).
Section 2 tells you how to use the percentage and calendar functions.
Section 3 tells you how to use the simple interest, compound interest, and
amortization functions.
Section 4 tells you how to do discounted cash flow analysis, bond, and
depreciation calculations.
Section 5 tells you about miscellaneous operating features such as
Continuous emory, the display, and special function keys.
Sections 6 and 7 tell you how to use the statistics, mathematics, and
number-alteration functions.
 Part II (sections 8 through 11) describe how to use the powerful
programming capabilities of the hp 12c.
 Part III (sections 12 through 16) give you step-by-step solutions to specialized
problems in real estate, lending, savings, investment analysis, and bonds.
Some of these solutions can be done manually, while others involve running
a program. Since the programmed solutions are both self-contained and
step-by-step, you can easily employ them even if you don’t care to learn how
to create your own programs. But if you do start to create your own
programs, look over the programs used in the solutions: they contain
examples of good programming techniques and practices.

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IntroductionIntroduction
Introduction
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 The various appendices describe additional details of calculator operation as
well as warranty and service information.
 The Function Key Index and Programming Key Index at the back of the
handbook can be used as a handy page reference to the comprehensive
information inside the manual
Financial Calculations in the United Kingdom
Financial Calculations in the United KingdomFinancial Calculations in the United Kingdom
Financial Calculations in the United Kingdom
The calculations for most financial problems in the United Kingdom are identical to
the calculations for those problems in the United States — which are described in
this handbook. Certain problems, however, require different calculation methods in
the United Kingdom than in the United States. Refer to Appendix F for more
information.
For
For For
For ore Solutions to Financial Problems
ore Solutions to Financial Problemsore Solutions to Financial Problems
ore Solutions to Financial Problems
In addition to the specialized solutions found in Sections 12 through 16 of this
handbook, many more are available in the optional hp 12c Solutions Handbook .
Included are solutions to problems in lending, forecasting, pricing, statistics,
savings, investment analysis, personal finance, securities, Canadian mortgages,
learning curves in manufacturing, and queuing theory. A Solutions Handbook is
available online (www.hp.com/calculators).

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Contents
ContentsContents
Contents
Introduction
IntroductionIntroduction
Introduction ................................
................................................................
................................................................
................................................................
........................................
................
........ 3
33
3
About This Handbook .................................................................... 3
Financial Calculations in the United Kingdom ................................... 4
For ore Solutions to Financial Problems .......................................... 4
Part I.
Part I.Part I.
Part I. Problem Solving
Problem SolvingProblem Solving
Problem Solving ................................
................................................................
.............................................
..........................
............. 15
1515
15
Section 1:
Section 1:Section 1:
Section 1: Getting Started
Getting StartedGetting Started
Getting Started ................................
................................................................
................................................
................................
................ 16
1616
16
Power On and Off ....................................................................... 16
Low-Power Indication ............................................................. 16
The Keyboard ............................................................................. 16
Keying in Numbers ............................................................... 17
Digit Separators ................................................................... 17
Negative Numbers ............................................................... 17
Keying in Large Numbers ...................................................... 18
The CLEAR Keys ................................................................... 18
Simple Arithmetic Calculations ...................................................... 19
Chain Calculations ...................................................................... 20
Storage Registers .......................................................................... 23
Storing and Recalling Numbers ............................................... 23
Clearing Storage Registers ...................................................... 24
Storage Register Arithmetic ..................................................... 24
Section 2:
Section 2:Section 2:
Section 2: Percentage and Calendar Functions
Percentage and Calendar FunctionsPercentage and Calendar Functions
Percentage and Calendar Functions ....................
........................................
.................... 26
2626
26
Percentage Functions..................................................................... 26
Percentages .......................................................................... 26
Net Amount .......................................................................... 27
Percent Difference .................................................................. 27
Percent of Total ...................................................................... 28
Calendar Functions ....................................................................... 29
Date Format .......................................................................... 29
Future or Past Dates................................................................30
Number of Days Between Dates ............................................. 31
Section 3:
Section 3:Section 3:
Section 3: Basic Financ
Basic FinancBasic Financ
Basic Financial Functions
ial Functionsial Functions
ial Functions ................................
................................................................
...................................
......
... 32
3232
32
The Financial Registers .................................................................. 32
Storing Numbers Into the Financial Registers ............................. 32

6 Contents
ContentsContents
Contents
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Displaying Numbers in the Financial Registers .......................... 32
Clearing the Financial Registers .............................................. 33
Simple Interest Calculations ........................................................... 33
Financial Calculations and the Cash Flow Diagram .......................... 34
The Cash Flow Sign Convention .............................................. 36
The Payment ode ............................................................... 37
Generalized Cash Flow Diagrams ........................................... 37
Compound Interest Calculations..................................................... 39
Specifying the Number of Compounding Periods and the Periodic
Interest Rate ......................................................................... 39
Calculating the Number of Payments or Compounding Periods ... 39
Calculating the Periodic and Annual Interest Rates ..................... 43
Calculating the Present Value ................................................. 44
Calculating the Payment Amount ............................................. 46
Calculating the Future Value ................................................... 48
Odd-Period Calculations ........................................................ 50
Amortization ............................................................................... 54
Section 4:
Section 4:Section 4:
Section 4: Additional Financial Functions
Additional Financial FunctionsAdditional Financial Functions
Additional Financial Functions ...........................
......................................................
........................... 57
5757
57
Discounted Cash Flow Analysis: NPV and IRR ................................. 57
Calculating Net Present Value (NPV) ....................................... 58
Calculating Internal Rate of Return (IRR) ................................... 63
Reviewing Cash Flow Entries................................................... 64
Changing Cash Flow Entries................................................... 65
Bond Calculations ....................................................................... 66
Bond Price ........................................................................... 67
Bond Yield ........................................................................... 67
Depreciation Calculations ............................................................. 68
Section 5:
Section 5:Section 5:
Section 5: Additional Operating Features
Additional Operating FeaturesAdditional Operating Features
Additional Operating Features ..........................
....................................................
.......................... 70
7070
70
Continuous emory ..................................................................... 70
The Display ................................................................................. 70
Status Indicators ................................................................... 70
Number Display Formats ....................................................... 71
Scientific Notation Display Format ........................................... 72
Special Displays ................................................................... 73
The key .............................................................................. 74
The Key .............................................................................. 74
Arithmetic Calculations With Constants .................................... 75
Recovering From Errors in Digit Entry ....................................... 75

Contents
ContentsContents
Contents 7
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Section 6:
Section 6:Section 6:
Section 6: Statistics Functions
Statistics FunctionsStatistics Functions
Statistics Functions ................................
................................................................
............................................
........................
............ 76
7676
76
Accumulating Statistics .................................................................. 76
Correcting Accumulated Statistics ...................................................77
ean .........................................................................................77
Standard Deviation ....................................................................... 79
Linear Estimation ......................................................................... 80
Weighted ean .......................................................................... 81
Section 7:
Section 7:Section 7:
Section 7: athematics and Number
athematics and Numberathematics and Number
athematics and Number-
--
-Alteration Functions
Alteration FunctionsAlteration Functions
Alteration Functions ....
........
.... 83
8383
83
One-Number Functions ................................................................. 83
The Power Function ....................................................................... 85
Part II.
Part II.Part II.
Part II. Programming
ProgrammingProgramming
Programming ................................
................................................................
.................................................
..................................
................. 87
8787
87
Section 8:
Section 8:Section 8:
Section 8: Programming Basics
Programming BasicsProgramming Basics
Programming Basics ................................
................................................................
.........................................
..................
......... 88
8888
88
Why Use Programs? .....................................................................88
Creating a Program ......................................................................88
Running a Program ....................................................................... 89
Program emory .........................................................................90
Identifying Instructions in Program Lines ................................... 91
Displaying Program Lines ........................................................ 92
The 00 Instruction and Program Line 00 ............................ 93
Expanding Program emory .................................................. 94
Setting the Calculator to a Particular Program Line ..................... 95
Executing a Program One Line at a Time ......................................... 96
Interrupting Program Execution ....................................................... 97
Pausing During Program Execution ........................................... 97
Stopping Program Execution ................................................ 101
Section 9:
Section 9:Section 9:
Section 9: Branching and Looping
Branching and LoopingBranching and Looping
Branching and Looping ................................
................................................................
...................................
......
... 103
103103
103
Simple Branching .......................................................................103
Looping ................................................................................... 104
Conditional Branching ................................................................ 107
Section 10:
Section 10:Section 10:
Section 10: Program Editing
Program EditingProgram Editing
Program Editing ................................
................................................................
.............................................
..........................
............. 1
11
113
1313
13
Changing the Instruction in a Program Line ................................... 113
Adding Instructions at the End of a Program ................................. 114
Adding Instructions Within a Program .......................................... 115
Adding Instructions by Replacement ...................................... 115
Adding Instructions by Branching .......................................... 116

8 Contents
ContentsContents
Contents
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Section 11:
Section 11:Section 11:
Section 11: ultiple Programs
ultiple Programsultiple Programs
ultiple Programs ................................
................................................................
.........................................
..................
......... 120
120120
120
Storing Another Program ............................................................ 120
Running Another Program ........................................................... 122
Part III.
Part III.Part III.
Part III. Solutions
SolutionsSolutions
Solutions ................................
................................................................
.....................................................
..........................................
..................... 123
123123
123
Section 12:
Section 12:Section 12:
Section 12: Real Estate and Lending
Real Estate and LendingReal Estate and Lending
Real Estate and Lending ................................
................................................................
.................................
..
. 124
124124
124
Annual Percentage Rate Calculations With Fees............................. 124
Price of a ortgage Traded at a Discount or Premium .................... 126
Yield of a ortgage Traded at a Discount or Premium ................... 128
The Rent or Buy Decision ............................................................ 130
Deferred Annuities ..................................................................... 134
Section 13:
Section 13:Section 13:
Section 13: Investment Analysis
Investment AnalysisInvestment Analysis
Investment Analysis ................................
................................................................
.......................................
..............
....... 136
136136
136
Partial-Year Depreciation ............................................................. 136
Straight-Line Depreciation ..................................................... 136
Declining-Balance Depreciation ............................................ 139
Sum-of-the-Years-Digits Depreciation ...................................... 141
Full- and Partial-Year Depreciation with Crossover .......................... 144
Excess Depreciation ................................................................... 148
odified Internal Rate of Return .................................................. 148
Section 14:
Section 14:Section 14:
Section 14: Leasing
LeasingLeasing
Leasing................................
................................................................
.........................................................
..................................................
......................... 151
151151
151
Advance Payments ..................................................................... 151
Solving For Payment ............................................................ 151
Solving for Yield ................................................................. 154
Advance Payments With Residual ................................................ 156
Solving for Payment ............................................................. 156
Solving For Yield ................................................................. 158
Section 15:
Section 15:Section 15:
Section 15: Savings
SavingsSavings
Savings ................................
................................................................
........................................................
................................................
........................ 160
160160
160
Nominal Rate Converted to Effective Rate ..................................... 160
Effective Rate Converted to Nominal Rate ..................................... 161
Nominal Rate Converted to Continuous Effective Rate ..................... 162
Section 16:
Section 16:Section 16:
Section 16: Bonds
BondsBonds
Bonds ................................
................................................................
...........................................................
......................................................
........................... 163
163163
163
30/360 Day Basis Bonds ........................................................... 163
Annual Coupon Bonds ............................................................... 166

Contents
ContentsContents
Contents 9
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Appendixes
AppendixesAppendixes
Appendixes ................................
................................................................
................................................................
................................................................
....................................
........
.... 169
169169
169
Appendix A:
Appendix A:Appendix A:
Appendix A: The Automatic emory Stack
The Automatic emory StackThe Automatic emory Stack
The Automatic emory Stack .......................
..............................................
....................... 170
170170
170
Getting Numbers Into the Stack: The Key ............................. 171
Termination of Digit Entry ..................................................... 172
Stack Lift ............................................................................. 172
Rearranging Numbers in the Stack ............................................... 172
The key...................................................................... 172
The Key ....................................................................... 172
One-Number Functions and the Stack ........................................... 173
Two-Number Functions and the Stack ............................................ 173
athematics Functions ......................................................... 173
Percentage Functions ............................................................ 174
Calendar and Financial Functions ................................................. 175
The LAST X Register and the Key ......................................... 176
Chain Calculations ..................................................................... 176
Arithmetic Calculations with Constants ..........................................177
Appendix B:
Appendix B:Appendix B:
Appendix B: ore About
ore About ore About
ore About L
LL
L ................................
................................................................
.........................................
..................
......... 179
179179
179
Appendix C:
Appendix C:Appendix C:
Appendix C: Error Conditions
Error ConditionsError Conditions
Error Conditions ................................
................................................................
..........................................
....................
.......... 181
181181
181
Error 0: athematics ................................................................. 181
Error 1: Storage Register Overflow ............................................... 182
Error 2: Statistics ........................................................................ 182
Error 3: IRR ................................................................................ 182
Error 4: emory ........................................................................ 182
Error 5: Compound Interest .......................................................... 183
Error 6: Storage Registers ............................................................ 183
Error 7: IRR ................................................................................184
Error 8: Calendar .......................................................................184
Error 9: Service ..........................................................................184
Pr Error .....................................................................................184
Appendix D:
Appendix D:Appendix D:
Appendix D: Formulas Used
Formulas UsedFormulas Used
Formulas Used ................................
................................................................
............................................
........................
............ 185
185185
185
Percentage ................................................................................ 185
Interest ...................................................................................... 185
Simple Interest ..................................................................... 185
Compound Interest ............................................................... 186
Amortization .............................................................................. 186
Discounted Cash Flow Analysis .................................................... 187
Net Present Value ................................................................ 187
Internal Rate of Return .......................................................... 187
Calendar .................................................................................. 187
Actual Day Basis ................................................................. 187

10 Contents
ContentsContents
Contents
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30/360 Day Basis .............................................................. 187
Bonds ...................................................................................... 188
Depreciation ............................................................................. 189
Straight-Line Depreciation ..................................................... 189
Sum-of-the-Years-Digits Depreciation ...................................... 189
Declining-Balance Depreciation ............................................ 190
odified Internal Rate of Return .................................................. 190
Advance Payments ..................................................................... 190
Interest Rate Conversions ............................................................ 191
Finite Compounding ............................................................ 191
Continuous Compounding .................................................... 191
Statistics ................................................................................... 191
ean ................................................................................ 191
Weighted ean ................................................................. 191
Linear Estimation ................................................................. 191
Standard Deviation ............................................................. 192
Factorial ............................................................................ 192
The Rent or Buy Decision ............................................................ 192
Appendix E:
Appendix E:Appendix E:
Appendix E: Batteries, Warranty, and Customer Care
Batteries, Warranty, and Customer CareBatteries, Warranty, and Customer Care
Batteries, Warranty, and Customer Care .......
..............
....... 193
193193
193
Batteries ................................................................................... 193
Low-Power Indication .................................................................. 193
Installing New Batteries ....................................................... 193
Verifying Proper Operation (Self-Tests) .......................................... 194
Perchlorate aterial – special handling may apply. ....................... 195
HP Limited Hardware Warranty and Customer Care ...................... 196
Customer Care .......................................................................... 197
Regulatory Information ............................................................... 200
Disposal of Waste Equipment by Users in Private Household in the
European Union ........................................................................ 202
Appendix F:
Appendix F:Appendix F:
Appendix F: United Kingdom Calculations
United Kingdom CalculationsUnited Kingdom Calculations
United Kingdom Calculations .......................
..............................................
....................... 203
203203
203
ortgages ................................................................................ 203
Annual Percentage Rate (APR) Calculations ................................... 204
Bond Calculations ..................................................................... 204
Function Key Index
Function Key IndexFunction Key Index
Function Key Index ................................
................................................................
.........................................................
..................................................
......................... 205
205205
205
Programming Key Index
Programming Key IndexProgramming Key Index
Programming Key Index ................................
................................................................
..................................................
....................................
.................. 208
208208
208
Subject Index
Subject IndexSubject Index
Subject Index ................................
................................................................
................................................................
................................................................
.................................
..
. 210
210210
210