Download HP 12c Calculator Skills for Real Estate: Self‐Study Guide/Certification Test Preparation...
HP 12c Calculator Skills for Real Estate Self ‐Study Guide/Certification Test Test Preparation Preparation
GetREFM.com GetREFM. com Copyright © 2013 by Real Estate Financial Modeling, LLC. All rights reserved. Hewlett‐Packard, HP and HP 12c are trademarks of Hewlett‐Packard Development Company L.P.
Overview. The Hewlett‐Packard “HP” 12c is the most widely‐used financial calculator in real estate. You will see it in meetings, board rooms and on financial analyst bullpen desks. Top commercial real estate finance professionals have sworn by it since its introduction in 1981 (before Excel even existed!). Unfortunately, while the HP 12c is powerful, using it is not that straightforward in that the keystrokes all seem to be totally backwards vs. what your intuition would tell you to do. This guide will teach you in plain English the skills and steps critical to successfully leverage the HP 12c for your real estate analyses. Enjoy! ‐ The REFM Team
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Table Of Contents
Overview of HP 12c Calculator Keys…
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1. Financial Registers…
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2. Simple Interest On A 360‐ Or 365‐Day Basis…
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3. Compound Interest…
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4. Periodic and Annual Interest Rates…
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5. Nominal Interest Rate Conversion to Effective Interest Rate…
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6. Effective Interest Rate Conversion to Nominal Interest Rate…
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7. Weighted Average Functions…
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8. Discounting Cash Flows: Net Present Value and IRR…
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9. Modified Internal Rate of Return (MIRR)…
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10. Annual Percentage Interest Rate Calculations with Fees…
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11. Price of a Mortgage Traded at a Discount or Premium…
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12. Yield of a Mortgage Traded at a Discount or Premium…
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Overview of HP 12c Calculator Keys
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1. Financial Registers What It Is: A “register” in 12c‐speak is a place in the calculator’s memory where a specific data value is stored for use in an ongoing calculation. Financial Registers are a subset of the many different Storage Registers that the 12c possesses. It is important to remember to clear these registers when the values are no longer needed. Application: To store a numeric value you want to associate with a variable, such as to make $1,000.00, as a constant Payment Amount, the value associated with the PMT variable. How To: a. Store a number into a financial register: i. Key the number into the display, then press the key for the
corresponding variable e.g., [n],[i],[PV],[PMT],[FV]
Example: Store 90 as [n], the number of days 1. 90[n] b. Recall a stored register value: i. [RCL] followed by the corresponding variable you wish to recall
Example: Recall the number of days 1. [n] c. Clear all the financial registers at once: i. [f][REG]
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2. Simple Interest On A 360‐ or 365‐Day Basis What It Is: “Simple” interest is interest that is calculated in each period off of the beginning of period account balance, where the account balance does not include any interest earned from previous periods. The annual interest rate can be applied against a 360‐day calendar or a 365‐day calendar. The 12c calculates on both bases at once, but displays on a 360‐day basis as a default. You can toggle to see the amount on a 365‐day basis as described below. Application: To calculate how much interest is being earned by a lender over a specified time period. How To: a. Calculate simple interest i. Enter the number of days to be used and press [n] ii. Enter the annual interest rate, then press [i] iii. Enter the principal amount borrowed, then press [CHS][PV] iv. Press [f][INT] to calculate and display the interest accrued on a 360 – day basis. v. If you wish to see the interest value on a 365‐day basis, press [R↓][x>
