HP 12C Financial calculator - Manual (Page 192)

192 Appendix D: Formulas Used
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 192 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
( ) ( )
⎥
⎥
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⎤
⎢
⎢
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− ⋅
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⎢
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−
⎥⎦
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−
=
∑
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∑ ∑
n
y
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n
x
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n
y x
xy
r
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Standard Deviation
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2 2
−
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Factorial
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For n > 1 where n is an integer:
∏
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=
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The Rent or Buy Decision
Market Value = PRICE(1 + I) n
where:
I = appreciation per year (as decimal)
n = number of years
Net Cash Proceeds on Resale = Market Value – Mortgage Balance – Commission
The interest rate is obtained by solving the financial (compound interest) equation
for i using:
n = number of years house is owned
PV = down payment + closing costs
PMT = mortgage payment + taxes + maintenance – rent – (% tax)
(interest + taxes)
FV = net cash proceeds on resale
Annual interest rate = 12 × i