Professional Documents
Culture Documents
RPN stands for Reverse Polish Notation. Reverse Polish Notation was developed in 1920
by Jan Lukasiewicz as a way to write a mathematical expression without using
parentheses and brackets. Hewlett-Packard Co., believed that Lukasiewicz's method was
superior to standard algebraic expressions when using calculators and computers, and
adapted RPN for its first hand-held scientific calculator, the HP35, in 1972.
Why Use RPN?
RPN saves time and keystrokes. You never have to account for the
parentheses while doing calculations. The process is similar to the way
you learned math on paper.
You can see the intermediary results as you perform your computations
rather than just the answer at the end.
An intermediate result allows the user to check the results and correct
errors more easily. It's easier to follow the stream of calculation.
RPN is logical because the user first gives the number and then tells what
to do with it.
Function Keys
To utilize the gold (above the key)
functions, press f and then the desired
key.
Mortgages/Bonds/Annuities
Cash Flow Keys
Statistics
Performance Analysis
Programming
HP 12 C Basics
Setting the display of Decimals (i.e., the
number of significant digits to right of
decimal point).
HP 12 C Basics
Register x is displayed, Register y was the
last number entered
[xy] exchanges the x and y registers
Keystrokes
[f] 2
[f] 3
[f] 4
[f] 5
Display
0.00
0.000
0.0000
0.00000
HP 12 C Stack
[R ] moves the stack down one register
you started.
HP 12 C Basics
Chain Calculations:
(36x10)+(12x50)= ?
Algebraic calculators need to store
intermediate calculations and then recall
them.
With RPN, the stack handles that
automatically!
HP 12 C Basics
Chain Calculations:
(36x10)+(12x50) = ?
Keystrokes
36 [ENTER]
10 [x]
12 [ENTER]
50 [x]
[+]
Display
36
360
12
600
960
Clearing Memory
Keystrokes
[CLX]
[f] CLEAR [CLX] / [REG]
[f] CLEAR [FIN]
[f] CLEAR []
[f] CLEAR [PRGM]
Clears
Display & X-register
X-register, Financial &
Data Storage, Stack
Financial Registers
Statistics Registers
Program memory*
36
36
360
360
360
12
12
360
Reg - X
36
36
10
360
12
12
50
600
960
Keystrokes:
36
ENTER
10
12
ENTER
50
Clearing Memory
Percent Change
If a stock went from $17 per share to
$21.50 per share, what was the percent
increase?
Keystrokes
Display
21.5 [ENTER]
21.5
17 []
4.5
17 []
.2647
or
26.47%
Keystrokes
17 [ENTER]
21.5 [%]
Display
17
26.47
Percent Key
If a $27 dollar stock increased by 8%, what
was its dollar increase?
Keystrokes
Display
27 [ENTER]
27
8 [%]
2.16
Storage Registers
20 Registers available for Storing intermediate
calculations.
First 10 are 0-9
Second 10 are .0-.9
Example, store the number 7:
Keystrokes
7 [STO] 0
Check:
[CLX]
[RCL] 0
Storage Registers
Note, some of the storage registers can be
used for program storage by the statistics
registers and during uneven cash flow
calculations. So you may get an error when
you attempt to use them.
Display
7
0
7
Display
4
2
Reciprocals
What is the reciprocal of 25 ?
Keystrokes
25 [1/x]
Other 12 C Keys
ex
LN
FRAC
INTG
MEM
Depreciation
Date DYS
EEX
Reciprocals
Days
To Calculate how many days old Marlon
Brando was when he died:
Keystrokes
[f] 6
4.031924 [ENTER]
7.022004 [g DYS]
Display
0.000000
4.031924
29,310.00
Date
A contract requires payment in full 115 days
from January 13, 2010. What is date, and
day-of-the-week, that the payment must be
made?
Keystrokes
Display
[f] 6
0.000000
1.132010 [ENTER]
1.132010
115 [g] [DATE]
5,08,2010 6
Powers
Calculate 103 (i.e., 10 Cubed)
Note: 103 = 10x10x10 = 1,000
Keystrokes
10 [ENTER]
3 [yx]
Display
10
1000
Powers
Calculate:
175
100)
Keystrokes
100 [ENTER]
2 [1/x]
[yx]
Display
100
0.50
10
Interest
Display
125
0.33
5
Interest (Cont.)
Keystrokes
125 [ENTER]
3 [1/x]
[Yx]
Display
10,000
700
Compound Interest
Now, how much interest do you earn in the
second year?
Keystrokes
10700 [ENTER]
.07 [x]
Display
10,700
749
Compound Interest
At the end of 1 year, with interest reinvested, you
will have:
10,000 x 1.07 = 10,700
At the end of 2 years, with interest reinvested, you
will have:
(10,000 x 1.07) x 1.07 = 11,449
Or:
10,000 x 1.072 = 11,449
$14,026
(1+r)n = 1
1.0700
1.1449
1.2250
1.3108
1.4026
n=
0.9346
0.8734
0.8163
0.7629
0.7130
1/(1+r)n =
$10,000
$14,026 (1.07)n=5
Discount Back
Present Value
$14,191
.07(n=5)
rn = 1
1.0725
n= 0
rn = 1
1
0.9324
1.1503
2
0.8694
1.2337
3
0.8106
$10,000
Present Value
1.3231
1.4191
0.7558
0.7047
$14,191 x .07(n=5)
Discount Back
10
Compound Interest
Compounding
Practice Problem
Rule of 72
Keystrokes
50000 [ENTER]
1.08 [ENTER]
9 [yx]
[x]
Display
50,000
1.08
2.00
99,950.23
11
Discounting
What is the Present Value of 100,000 received 6
years from now discounted at 12% per year?
PV x 1.12 6 = 100,000
PV = 100,000 / 1.126
Keystrokes
Display
100000 [ENTER]
1.12 [ENTER]
6 [yx]
[]
100,000
1.12
1.97
50,663.11
Practice Problem
How much must you invest today to have
$500,000 20 years from now assuming you
earn 10% per year?
Keystrokes
500000 [ENTER]
1.1 [ENTER]
20 [yx]
[]
Display
500,000
1.1
6.73
74,321.81
Practice Problem
How much does a 18 year old need to invest
today to have $1,000,000 at age 70 (52
years from now) assuming she earns a
return of 11% per year?
Keystrokes
Display
1000000 [ENTER] 1,000,000
1.11 [ENTER]
1.1
x
52 [y ]
227.4
[]
4,397.49
Financial Keys
12
Financial Keys
Financial Keys
n
PV
PMT
FV
n number of periods
i interest per period (For 10% enter 10)
PV Present Value
PMT* Payment (Must be constant over n periods)
FV Future Value
Useful for:
Mortgages
Annuities
Bonds
Discounting
Compounding
Calculating Internal Rate of Return
Financial Keys
Input the Knowns
Financial Keys solve for the unknown that
Practice Problem
How much do you need to invest today to
have $500,000 20 years from now assuming
you earn 10% per year?
This time use the Financial Keys.
What are our knowns?
What is our unknown?
13
Financial Keys
Example:
[f] CLEAR [FIN] or [f] CLEAR [CLX]
(sets all Financial Registers to 0)
n
20
i
10
PV
?
PMT
0
FV
500,000
PV = 74,321.81
Display
0
100,000
6
12
50,663.11
Display
0
50,000
8
9
99,950.23
Financial Keys
n
PV
PMT
FV
14
Escalation Rate
If the cost of Tuition increased from $5,000
to $17,000 over the last 12 years, what was
the annual rate of increase (i.e., CAGR)?
Keystrokes
Display
12 [n]
12
5000 [PV]
5,000
17000 [CHS] [FV]
-17,000
[i]
10.74
Page 69
of
Workbook
15
Keystrokes
Display
1000 [ENTER]
1,000
1.428571
1.038258
0.038258
3.8258
700 []
9.5 [1/x] [yx]
1 []
100 [X]
Display
700
1,000.00
9.50
9.50
c
3.8258
16
Annuities
Cash Flow problems, with a constant
Annuities
2 Basic Types:
Annuity
How much does Ann need to save by the
time she is 65, if she wants to withdraw
$20,000 per year (starting on the day she
turns 65) through her life expectancy of age
90?
She will withdraw her last $20,000 on her
89th birthday. Assume she will earn 8% on
the invested balance of the annuity.
17
. . . . . . . . . . . . .
$20,000
$20,000
65
89
PV
FV = 0
Now
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
1*
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
90
Payments
* Annuity Due, use [g] [BEG] function, means first payment occurs at age
65.
If Ordinary Annuity, use [g] [END] function, then first payment occurs at
age 66 which is the end of the first year of the annuity period. (See time
line below.)
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
18
Anns Annuity
n
[g] [BEG] 25
i
8
Keystrokes
[g] [BEG]
25 [n]
8 [i]
20000 [PMT]
0 [FV]
[PV]
PV
?
PMT
20,000
FV
0
Display
0
25
8
20,000
0
230,575.17
Anns Annuity
If Ann just turned 35 years old, how much
does she need to save at the end of each
month, to have sufficient funding for her
retirement at age 65? Assume she will earn
10% per year compounded monthly.
19
Annuity Due
(Annually)
$20,000
. . . . . . . . . . . . .
65
Now
Ordinary
Annuity
$20,000
89 90
PV = 230,575
FV = 0
PMT
(Monthly)
. . . . . . . . . . . . . .
35
65
PV = 0
89 90
FV
Anns Annuity
Keystrokes
[g] [END]
30 [g] [n]
10 [g] [i]
[RCL] [PV] [CHS]
[ENTER] [FV]
0 [PV]
[PMT]
Display
230,575
360
0.833
230,575
230,575
0
-102
20
GETTING GOING
By JONATHAN CLEMENTS
What to Leave Behind: Choosing Assets That Will Benefit Your Kids
the Most
June 29, 2005; Page D1
2.
If you're in poor health, hang onto real estate and taxableaccount investments with big gains, so your kids get the stepup in basis.
3.
21
Mortgage Calculations
What is the monthly payment on a 30 year,
$250,000 mortgage at 7.5%?
What are the knowns?
What is the unknown?
Required Return
If James needs $500,000 at retirement in 30 years,
and he expects to save $200 per month, what
average annual compound required return would
he need to earn on his savings to reach his goal?
Keystrokes
500000 [FV]
200 [CHS] [PMT]
30 [g] [n]
[i]
12 [x]
Display
500,000
-200
360
0.87
10.47
Mortgage Calculations
What is the monthly payment on a 30 year,
$250,000 mortgage at 7.5%?
Keystrokes
Display
[f] Clear [CLX]
0
30 [g] [n]
360
7.5 [g] [i]
0.63
250000 [PV]
250,000
[PMT]
1,748.04
22
Mortgage Calculations
What would the payment be if the interest
Practice Problem
What is the total interest paid over the life of
the loan for a 15 year, $250,000 mortgage at
7.5%?
Mortgage Calculations
What is the total amount of interest that will
be paid over the life of a 30 year mortgage
for $250,000 at fixed interest rate of 7.5%?
Keystrokes
-1,748.04 [CHS] [ENTER]
360 [x]
250000 []
Display
1,748.04
629,293.06
379,293.06
Remaining Balance
To calculate the remaining balance after 15
years, of a 30-year, $250,000 mortgage at
7.5%?
1. Set up the loan in the Financial Keys
2. calculate the payment
3. Input 180 for n (number of months
remaining in mortgage)
4. Calculate PV
23
Remaining Balance
Remaining Balance
[PMT] = 1,748.04
Change [n] to 180
Recalculate [PV] = 188,566.66
Interest
How much interest will be paid in the first
180 payments of a 30 year, $250,000
mortgage with fixed rate of 7.5%?
Interest
How much interest will be paid in the first 180
payments of a 30 year, $250,000 mortgage
with fixed rate of 7.5%?
We know total amount paid:
1,748.04 x 180 = 314,647.20
We know principal paid:
61,433.34
So, interest paid will be:
314,647.20 - 61,433.34 = 253,213.86
24
Mortgage Amortization
Mortgage Set-up
Keystrokes
Display
30 [g] [n]
7.5 [g] [i]
250000 [PV]
[PMT]
354 [n]
[PV]
[CHS]
250000 [+]
360
0.63
250,000
-1,748.04
354
248,869.24
-248,869.24
1,130.76 (Principal)
Display
1,130.76 Principal
-1,130.76
1,748.04
10,488.24
9,357.48 Interest
25
FV
0
Display
-1,748.04
0
9,357.46 (Interest)
1,130.78 (Principal)
248,869.22
6
26
1st Year
2nd Year
Keystrokes
30 [g] [n]
7.5 [g] [i]
250000 [PV]
[PMT]
0 [n]
12 [f] [AMORT]
[xy]
[RCL] [n]
12 [f] [AMORT]
[xy]
Display
360
0.63
250,000
-1,748.04
0
-18,671.85
-2,304.63
12
-18,492.93
-2,483.55
[RCL] [n]
24
= Interest
= Principal
= Interest
= Principal
Amortization Instructions
AMORT
n = 30
i = 5.25%
PV = 50 000
# PMTS = 12
1)
2)
3)
4)
Note: The instructions on the back of some of the Platinum HP12c calculators may
contain an error. Line 1) may incorrectly show the Present Value input as 5000
instead of the correct value: 50000.
27
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