Sharp EL-738C User Manual
51
Conversion between APR and EFF
Interest rates can be converted between APR (annual, or nomi-
nal percentage rate) and EFF (effective interest rate).
nal percentage rate) and EFF (effective interest rate).
• The APR is an investment’s annual rate of interest when com-
pounding happens only once a year. The interest rate printed
on a bond is an example of an APR.
on a bond is an example of an APR.
• The EFF is an investment’s annual rate of interest when com-
pounding happens more often than once a year. It refl ects the
actual amount of return for a given nominal rate. For example,
if your investment compounds monthly, then the stated nomi-
nal percentage rate becomes a monthly rate, and the EFF
refl ects your actual annual rate of return.
actual amount of return for a given nominal rate. For example,
if your investment compounds monthly, then the stated nomi-
nal percentage rate becomes a monthly rate, and the EFF
refl ects your actual annual rate of return.
Basic operations
1. Press
s to clear the display. Make sure the calculator is
in NORMAL mode.
2. Enter the calculation data in the following format:
• To change APR to EFF:
Number of compounding periods per year
Number of compounding periods per year
> Nominal
percentage rate
. P
• To change EFF to APR:
Number of compounding periods per year
Number of compounding periods per year
> Effective
interest rate
. !
Converting between APR and EFF
Procedure
Key operation
Display
Calculate the
effective interest
rate for twelve
compounding
periods with an
18% APR.
effective interest
rate for twelve
compounding
periods with an
18% APR.
s 12 > 18 . P
12,18¬EFF
1956
Convert this rate
back to the origi-
nal APR.
back to the origi-
nal APR.
12 > 19.56 . !
12,19.56¬APR
1800
3 Financial FunctionsCurrent.indd 51
3 Financial FunctionsCurrent.indd 51
06.7.10 8:38:49 PM
06.7.10 8:38:49 PM