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Solving the TVM equation for the interest rate
04-15-2018, 02:55 PM (This post was last modified: 04-15-2018 02:56 PM by Dieter.)
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RE: Solving the TVM equation for the interest rate
(04-15-2018 10:46 AM)Gamo Wrote:  I was wondering on how HP doing this TVM on finding the interest [i] also.
I'm happen to read more about this in HP Journal Issue October 1977 start from page 22 in the article state that the previous HP-80 Financial Calculator used 3 separate TVM formula which their performance deteriorated unacceptably when they were applied to the new more general equation. On the newer desktop model the HP-92 used better general equation using one formula all together and did work out very well.

As far as I can tell the HP92 got the more universal TVM equation as we know it today. The 1977 article says that solving for the interest rate uses the Newton method based on an initial guess which is accurate to 5 decimal places (!). But there is no clue on how they did this.

(04-15-2018 10:46 AM)Gamo Wrote:  Link to this HP Journal: https://www.dropbox.com/s/6beqloidryfdim...7.pdf?dl=0

Here is a link to all available HP Journals on the HP website.

The mentioned HP80 article can be found in the May 1973 issue. There even is a flowchart, but with a wrong description of how the initial interest rate is calculated. Appendix A on page 8 has a different formula that looks better. There even is a more or less complete description of the interest rate algorithm (if PV is given an FV=0). Note that the HP80 did not use the sign convention of later HP financial calculators.

Dieter
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RE: Solving the TVM equation for the interest rate - Dieter - 04-15-2018 02:55 PM



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