User Manual

104 BA II PLUS™ Calculator
Interest Conversion Worksheet
Interest Conversion Worksheet Labels
Press
& v
to access the Interest Conversion worksheet.
Label Meaning Variable Type
NOM
Nominal rate Enter/compute
EFF
Annual effective rate Enter/compute
C/Y
Compounding periods per year Enter-only
Notes about the Interest Conversion Worksheet
♦
You may need to compare interest rates on investments that
have the same nominal interest rate (annual percentage rate)
but a different number of compounding periods per year. In
these situations, simply comparing the nominal rates is
misleading. Before you can make a valid comparison, you
should convert the nominal interest rate (
NOM
) to the annual
effective interest rate (
EFF
) for each investment.
♦
The nominal interest rate (
NOM
) is the interest rate per
compounding period multiplied by the number of
compounding periods per year.
♦
The annual effective interest rate (
EFF
) is the compound
annual interest rate that you actually earn for the period of
time stated.
♦
& z
sets
NOM
and
EFF
to zero, but does not affect
C/Y
.
♦
& } !
sets
NOM
and
EFF
to zero, and
C/Y
to 12.
♦
You can convert a nominal rate to an annual effective rate, or
vice versa.
♦
Enter a value for
NOM
or
EFF
as an annual rate.