To Press Display

Comparing the Nominal Interest Rate of Investments

Comparing the nominal interest rate (annual percentage rate) of

investments is misleading when the investments have the same nominal

rate but different numbers of compounding periods per year.

To make a more valid comparison, convert the nominal interest rate

(NOM) to the annual effective interest rate (EFF) for each investment.

• The nominal interest rate (NOM) is the interest rate per

compounding period multiplied by the number of compounding

periods per year.

• The annual effective interest rate (EFF) is the compound annual

interest rate that you actually earn for the period of time stated.

Resetting Variables

• To reset all calculator variables and formats to default values,

including the Interest Conversion worksheet variables, press &

} !.

• To clear the NOM and EFF variables and reset default values without

affecting C/Y, press & z in the Interest Conversion

worksheet.

Converting Variables

You can convert a nominal rate to an annual effective rate or vice versa.

Entering Values for Nom and EFF

Enter a value for NOM or EFF as an annual rate.

Converting Interest Rates

1. To access the Interest Conversion worksheet, press & v. The

current NOM value appears.

2. To clear the worksheet, press & z.

3. Enter a value for the known interest rate (either NOM or EFF).

4. To enter a value for a known variable, press # or " until NOM or

EFF is displayed, key in a value, and press !.

5. Press # to display C/Y. If necessary, change the value and press !.

Variable Default

NOM 0

EFF 0

C/Y 1

6. To compute a value for the unknown variable (interest rate), press #

or " until NOM or EFF is displayed, and then press %. The

calculator displays the computed value.

Example: A bank offers a certificate that pays a nominal interest rate of

15% with quarterly compounding. What is the annual effective interest

rate?

Answer: A nominal interest rate of 15% compounded quarterly is

equivalent to an annual effective interest rate of 15.87%.

Date Worksheet

Date Worksheet Variables

To Press Display

Select Interest Conversion

worksheet.

& v NOM= 0

Enter nominal interest rate. 15 ! NOM= 15.00

Enter number of compounding

periods per year.

# # 4 ! C/Y= 4.00

Compute annual effective

interest rate.

" % EFF= 15.87

Use the Date worksheet to find the number of days

between two dates. You can also compute a date and day

of the week based on a starting date and a specified

number of days.

• To access the Date worksheet, press & u.

• To access the date variables, press # or ".

• To select the day-count method (ACT and 360), press

& V once for each option.

Variable Key Display Variable Type

Date 1 & u DT1 Enter/compute

Date 2 # DT2 Enter/compute

Days between dates # DBD Enter/compute

Actual/actual day-count method # ACT* Setting

30/360 day-count method # 360* Setting

Note: The calculator categorizes variables by their method of entry. (See

“Types of Worksheet Variables” on page 17.)

Resetting the Date Worksheet Variables

• To reset default values for all calculator variables and formats,

including the Date worksheet variables, press & } !.

• To clear Date worksheet variables and reset default values without

affecting the day-count method, press &z while in the Date

worksheet.

Entering Dates

• The calculator assumes that DT1 is earlier than DT2.

• Enter dates for DT1 and DT2 in the selected US or European date

format.

• When you compute a date for DT1 or DT2, the calculator displays a

three-letter abbreviation for the day of the week (for example,

WED).

Selecting the Day-Count Method Affects Calculations

• When you select ACT as the day-count method, the calculator uses

the actual number of days in each month and each year, including

adjustments for leap years.

• When you select 360 as the day-count method, the calculator

assumes 30 days per month (360 days per year). You can compute

DBD using this day-count method, but not DT1 or DT2.

Computing Dates

1. To select the Date worksheet, press & u. The DT1 value is

displayed.

2. To clear the worksheet, press & z.

3. Enter values for two of the three variables: DT1, DT2, and DBD.

Note: Do not enter a value for the variable you wish to solve for.

4. To enter a value for a variable, press # or " to display the variable.

5. Key in a value and press !.

Variable Default Variable Default

DT1 12-31-1990 DBD 0

DT2 12-31-1990 Day-count

method

ACT

6. To change the day-count method setting, press # until ACT or 360 is

displayed.

7. To compute a value for the unknown variable, press # or " to

display the variable, and then press %. The calculator displays the

computed value.

Example: Computing Days between Dates

A loan made on September 4, 2003 defers the first payment until

November 1, 2003. How many days does the loan accrue interest before

the first payment?

Answer: Because there are 58 days between the two dates, the loan

accrues interest for 58 days before the first payment.

Comparing the Nominal Interest Rate of Investments

Comparing the nominal interest rate (annual percentage rate) of

investments is misleading when the investments have the same nominal

rate but different numbers of compounding periods per year.

To make a more valid comparison, convert the nominal interest rate

(NOM) to the annual effective interest rate (EFF) for each investment.

• The nominal interest rate (NOM) is the interest rate per

compounding period multiplied by the number of compounding

periods per year.

• The annual effective interest rate (EFF) is the compound annual

interest rate that you actually earn for the period of time stated.

Resetting Variables

• To reset all calculator variables and formats to default values,

including the Interest Conversion worksheet variables, press &

} !.

• To clear the NOM and EFF variables and reset default values without

affecting C/Y, press & z in the Interest Conversion

worksheet.

Converting Variables

You can convert a nominal rate to an annual effective rate or vice versa.

Entering Values for Nom and EFF

Enter a value for NOM or EFF as an annual rate.

Converting Interest Rates

1. To access the Interest Conversion worksheet, press & v. The

current NOM value appears.

2. To clear the worksheet, press & z.

3. Enter a value for the known interest rate (either NOM or EFF).

4. To enter a value for a known variable, press # or " until NOM or

EFF is displayed, key in a value, and press !.

5. Press # to display C/Y. If necessary, change the value and press !.

Variable Default

NOM 0

EFF 0

C/Y 1

6. To compute a value for the unknown variable (interest rate), press #

or " until NOM or EFF is displayed, and then press %. The

calculator displays the computed value.

Example: A bank offers a certificate that pays a nominal interest rate of

15% with quarterly compounding. What is the annual effective interest

rate?

Answer: A nominal interest rate of 15% compounded quarterly is

equivalent to an annual effective interest rate of 15.87%.

Date Worksheet

Date Worksheet Variables

To Press Display

Select Interest Conversion

worksheet.

& v NOM= 0

Enter nominal interest rate. 15 ! NOM= 15.00

Enter number of compounding

periods per year.

# # 4 ! C/Y= 4.00

Compute annual effective

interest rate.

" % EFF= 15.87

Use the Date worksheet to find the number of days

between two dates. You can also compute a date and day

of the week based on a starting date and a specified

number of days.

• To access the Date worksheet, press & u.

• To access the date variables, press # or ".

• To select the day-count method (ACT and 360), press

& V once for each option.

Variable Key Display Variable Type

Date 1 & u DT1 Enter/compute

Date 2 # DT2 Enter/compute

Days between dates # DBD Enter/compute

Actual/actual day-count method # ACT* Setting

30/360 day-count method # 360* Setting

Note: The calculator categorizes variables by their method of entry. (See

“Types of Worksheet Variables” on page 17.)

Resetting the Date Worksheet Variables

• To reset default values for all calculator variables and formats,

including the Date worksheet variables, press & } !.

• To clear Date worksheet variables and reset default values without

affecting the day-count method, press &z while in the Date

worksheet.

Entering Dates

• The calculator assumes that DT1 is earlier than DT2.

• Enter dates for DT1 and DT2 in the selected US or European date

format.

• When you compute a date for DT1 or DT2, the calculator displays a

three-letter abbreviation for the day of the week (for example,

WED).

Selecting the Day-Count Method Affects Calculations

• When you select ACT as the day-count method, the calculator uses

the actual number of days in each month and each year, including

adjustments for leap years.

• When you select 360 as the day-count method, the calculator

assumes 30 days per month (360 days per year). You can compute

DBD using this day-count method, but not DT1 or DT2.

Computing Dates

1. To select the Date worksheet, press & u. The DT1 value is

displayed.

2. To clear the worksheet, press & z.

3. Enter values for two of the three variables: DT1, DT2, and DBD.

Note: Do not enter a value for the variable you wish to solve for.

4. To enter a value for a variable, press # or " to display the variable.

5. Key in a value and press !.

Variable Default Variable Default

DT1 12-31-1990 DBD 0

DT2 12-31-1990 Day-count

method

ACT

6. To change the day-count method setting, press # until ACT or 360 is

displayed.

7. To compute a value for the unknown variable, press # or " to

display the variable, and then press %. The calculator displays the

computed value.

Example: Computing Days between Dates

A loan made on September 4, 2003 defers the first payment until

November 1, 2003. How many days does the loan accrue interest before

the first payment?

Answer: Because there are 58 days between the two dates, the loan

accrues interest for 58 days before the first payment.