HP HP-15C, Owner'S Handbook Manual

Page: 95 / 288

Section 8: Program Branching and Controls 95
Example: Flags
Calculations on debts or investments can be calculated in two ways: for
payments made in advance (at the beginning of a given period) and for
payments made in arrears (at the end of a given period). If you write a
program to calculate the value (or ―present value‖) of a debt or investment
with periodic interest and periodic payments, you can use a flag as a status
indicator to tell the program whether to assume payments are made in
advance or payments are made in arrears.
Suppose you are planning the payment of your child's future college tuition.
You expect the cost to be about $3,000/year or about $250/month. If you
wanted to withdraw the monthly payments from a bank account yielding
6% per year, compounded monthly (which equals 0.5% per month), how
much must you deposit in the account at the start of the college years to
fund monthly payments for the next 4 years?
The formula is
) (1
) (1 1
i
i
i
P V
n









 


if payments are to be made
each month in advance,
and the formula is








 


i
i
P V
n
) (1 1
if payments are to be made
each month in arrears.
V is the total value of the deposit you must make in the account;
P is the size of the periodic payment you will draw from the account;
i is the periodic
interest rate (here: ―periodic‖ means monthly, since interest
is compounded monthly); and
n is the number of compounding periods (months).
The following program allows for either payment mode. It assumes that,
before the program is run,
P is in the Z-register, n is in the Y-register, and i
is in the X-register.