Using the HP-12c calculator for financial calculations

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This is a brief guide to using the HP-12c financial calculator. It does not replace your instruction booklet, nor does it replace actually practicing with the calculator.

In the materials below, BOLD FACE indicates that you press a key with that label on your HP12c; # indicates that you press a number key; f indicates that you press the yellow-orange key; and g indicates that you press the blue key.

Setting up your calculator

To set the number of digits after the decimal point, press f # where # is the number of digits you want to display after the decimal point. For example, press f2 to display 2 digits after the decimal.

Financial functions

To do any calculation in finance using beginning of period payments, press g7. That will light the "begin" sign in your window. To get end of period payments, press g8. That will turn off the begin sign in your window.

You should use the following sign convention when you work on financial calculations:

Treat cash flows you are receiving as positive numbers.
Treat cash flows you are paying out as negative numbers.

To turn a positive number into a negative number, enter the number on your keypad and press CHS

In the calculations below, remember the sign convention! If you have an error, either that or omitted data is the most likely cause. Remember also that the interest rate must be consistent with the number of periods. If you have 12 percent annual interest, and are using 12 periods per year, you would enter 1 into i (or you could enter 12 g i).

To calculate First clear Next enter Next enter Next enter Next enter Push for result
Future value fX<>Y and fCLX # n # i (consistent with n) #PMT (if any). Annuity payments # PV (if any). Single payments now FV
Present value fX<>Y and fCLX # n # i (consistent with n) #PMT (if any). Annuity payments # FV (if any). Single payments at time n PV
Interest rate fX<>Y and fCLX # n #PMT (if any). Annuity payments # PV (if any). Single payments now # FV (if any). Single payments at time n i
Annuity payment fX<>Y and fCLX # n # i (consistent with n) #PV (if any). Single payments now # FV (if any). Single payments at time n PMT


To calculate	First clear	Next enter	Next enter	Next enter	Next enter	Push for result
Future value	fX<>Y and fCLX	# n	# i (consistent with n)	#PMT (if any). Annuity payments	# PV (if any). Single payments now	FV
Present value	fX<>Y and fCLX	# n	# i (consistent with n)	#PMT (if any). Annuity payments	# FV (if any). Single payments at time n	PV
Interest rate	fX<>Y and fCLX	# n	#PMT (if any). Annuity payments	# PV (if any). Single payments now	# FV (if any). Single payments at time n	i
Annuity payment	fX<>Y and fCLX	# n	# i (consistent with n)	#PV (if any). Single payments now	# FV (if any). Single payments at time n	PMT

To amortize a loan

Do the steps for annuity payment as shown above. Then enter 0 into n. Enter # (the number of periods you want to amortize) followed by fn [amort]. For example, to calculate interest and principal paid for the first five periods of a loan, enter 5 amort:

The interest paid for the interval you amortized is shown on the screen.
To show the principal paid for the interval, press x><y.
To show the remaining balance of the loan, press RCL PV.

If you had 12 months of payments on your house loan after the short first interval of 5 payments above, you'd press 12 amort. The first calculation would amortize 5 months of the loan, and the second calculation would amortize 12 months of the loan. Press # amort for each subsequent interval you wish to amortize

To calculate IRR and NPV

Enter the cash flows as follows, remembering the sign convention:

Clear previous data by pressing fX<>Y and fCLX.
Enter the cash flow at time zero using # gPV [# CF₀].
Enter subsequent cash flows using # gPMT [# CF_j].
If a cash flow is repeated, enter the number of times it is repeated (including the first time you just entered) using # gFV [# N_j]. For example, three equal flows in a row would be entered as 3 N_j.
When you have entered your last cash flow:
- If you are calculating an NPV, enter your interest rate as # i (consistent with interval between cash flows) followed by fPV [NPV].
- If you are calculating an IRR, enter fFV [IRR].

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Last updated 04/16/98 by MKinsman@pepperdine.edu