Solving the TVM equation for the interest rate

[Csaba Tizedes]

(04-15-2018 05:30 PM)Carsen Wrote:  

(04-15-2018 08:39 AM)Dieter Wrote:  So the result seems to depend on previous input ?!

I believe you are right Dieter. Try this on your HP-12C emulator.

CLEAR FIN
n = 10
PMT = -1,000
FV = 10,000
i = 0.001

If you solve for i, the answer is 2.152976E-11, rather than 0 when you leave the value of i at 0. This proves that since we changed the initial value in i from 0 to 0.001, it changed the result. It's almost like it uses the value in the i register as a initial guess. Just as you concluded before.

IMHO there is a test for result=0 AND if the test is false the algorithm checks the abs(ch% of result)<=eps%. It seems a more possible explanation.

Csaba