Solving for Yield. HP 12C Platinum Financial Calculator, 12c

206 Section 14: Leasing

Solving for Yield

To calculate the periodic yield, information is entered as follows:

1. Press g and fCLEARG.

RPN Mode:

2. Key in the total number of payments in the lease then press \.

3. Key in the total number of payments made in advance then press

?0-n.

4. Key in the periodic payment to be received then press P.

5. Key in the total amount of the loan then press Þ:0:P§+$.

6. Press ¼ to obtain the periodic yield.

ALG Mode:

2. Key in the total number of payments in the lease then press -.

3. Key in the total number of payments made in advance then press

?0n.

4. Key in the periodic payment to be received then press P.

5. Press :0§:P³+. Then key in the total amount of the loan and press Þ$.

6. Press ¼ to obtain the periodic yield.

Example 1: A lease has been written to run for 60 months. The leased equipment has a value of $25,000 with a $600 monthly payment. The lessee has agreed to make 3 payments at the time of closing ($1,800). What is the annual yield to the lessor?

Keystrokes

(RPN mode)

Keystrokes

(ALG mode)

Display f] g fCLEARG f[ g fCLEARG

60\3 60-3

?0-n ?0n

600P 600P

25000Þ:

0:P§

+$

:0§:

P+25000

Þ$

3.

57.00

600.00

-23,200.00

Number of periodic payments.

Monthly payment.

PV.

File name: hp 12c pt_user's guide_English_HDPMF123E27 Page: 206 of 275

Printed Date: 2005/8/1 Dimension: 14.8 cm x 21 cm

Keystrokes

(RPN mode)

¼

Keystrokes

(ALG mode)

¼

Display

12§ §12³

1.44

17.33

Monthly yield

(calculated).

Annual yield (as a percentage).

If solving for yield will be done repetitively, key in the following hp 12c platinum program:

KEYSTROKES

(RPN mode) fs

DISPLAY

KEYSTROKES

(ALG mode) fs

DISPLAY

§

+

$

¼

:3

Þ

:1

:P fCLEARΠg fCLEARG

:0

:1

- n

:2

P

000, fCLEARÎ

001, 43 8 gÂ

002, 42 34 fCLEARG 002, 42 34

003, 45 0 :0

004, 45 1 -

003, 45 0

004, 30

005, 30 :1

006, 11 n

007, 45 2 :2

008, 14 P

009, 45 3 §

010, 16

011, 45 1

012, 45 14

013,

014,

20

40

:1

-

:3

$

¼

015, 13 :gC

016, 12 fs

000,

001, 43 8

005, 45 1

006,

007, 45 2

008,

009,

11

14

20

010, 45 1

011,

014, 12

015,45,43 12

30

012, 45 3

013, 13

File name: hp 12c pt_user's guide_English_HDPMF123E27 Page: 207 of 275

Printed Date: 2005/8/1 Dimension: 14.8 cm x 21 cm

208 Section 14: Leasing

KEYSTROKES

(RPN mode)

:gC

DISPLAY

017,45,43 12

KEYSTROKES

(ALG mode)

DISPLAY fs n: n–#Adv. Pmts.

FV: 0 i: i

R

0

: n

R

4

–R

.7

: Unused

REGISTERS

PV: Used

R

1

: Adv. Pmts.

PMT: Pmt.

R

2

: Pmt.

R

3

: Loan

1. Key in the program.

2. Key in the total number of payments in the lease then press ?0.

3. Key in the total number of payments made in advance then press ?1.

4. Key in the periodic payment to be received then press ?2.

5. Key in the total amount of the loan, then press ?3; then press t to obtain the periodic yield.

6. For a new case, return to step 2. The values changed from the previous case are the only values which need to be re-entered.

Example 2: Using the program, solve for yield using the same information given in example 1. Then change the payment to $625 and solve for the yield.

Keystrokes

(RPN mode) f]

Keystrokes

(ALG mode) f[

60?0 60?0

3?1 3?1

600?2 600?2

25000?3t 25000?3t

625?2t 625?2t

Display

60.00 Number of payments.

3.00 Number of advance payments.

600.00 Periodic payment.

17.33

19.48

Annual yield (as a percentage).

Annual yield (as a percentage) when PMT is increased $25.

File name: hp 12c pt_user's guide_English_HDPMF123E27 Page: 208 of 275

Printed Date: 2005/8/1 Dimension: 14.8 cm x 21 cm