{"id":12278,"date":"2015-09-14T18:56:10","date_gmt":"2015-09-14T18:56:10","guid":{"rendered":"http:\/\/www.oracletutoring.ca\/blog\/?p=12278"},"modified":"2015-09-14T18:56:10","modified_gmt":"2015-09-14T18:56:10","slug":"financial-math-hewlett-packard-10b-internal-rate-of-return","status":"publish","type":"post","link":"https:\/\/www.oracletutoring.ca\/blog\/financial-math-hewlett-packard-10b-internal-rate-of-return\/","title":{"rendered":"Financial math: Hewlett-Packard 10B: internal rate of return"},"content":{"rendered":"

The tutor brings up what he finds a fascinating concept: internal rate of return.<\/h1>\n

The way I understand it, the internal rate of return is the interest rate that would make possible an exact sequence of deposits and withdrawals, with ending balance zero. Consider the following question:<\/p>\n

An investor buys a house for $130K. One month later, he puts another $60K into the house. Two months after that, he sells the house for $215K. Finally, one month after that, he pays $7.5K in various closing costs, etc. What is his internal rate of return (IRR)?<\/b><\/p>\n

Solution:<\/p>\n

Paying out is negative; receiving is positive.<\/p>\n

We obtain the answer from the HP 10B as follows:<\/p>\n

    \n
  1. Press __<\/span> INPUT.<\/li>\n
  2. Key in 12<\/span> then press __<\/span> PMT.<\/li>\n
  3. Key in 130000<\/span> then the +\/-<\/span> key, then CFj<\/sub><\/span>.<\/li>\n
  4. 60000 +\/- CFj<\/sub><\/li>\n
  5. 0 CFj<\/sub><\/li>\n
  6. 215000 CFj<\/sub><\/li>\n
  7. 7500 +\/- CFj<\/sub><\/li>\n
  8. Now, to get the annual internal rate of return, key __<\/span>CST<\/li>\n<\/ol>\n

    In this case, I get the answer 40.53<\/span>, which means the developer is making 40.53% (equivalent annual rate) on his money (this time:)).<\/p>\n

    While real estate investing is risky and tricky, I hope you’ll agree that finding the internal rate of return (IRR) with the HP 10B is straightforward.<\/p>\n

    Source:<\/p>\n

    Hewlett-Packard Business Calculator Owner’s Manual<\/u>. Corvallis: Hewlett-Packard,
       1988.<\/p>\n

    Jack of Oracle Tutoring by Jack and Diane,<\/a> Campbell River, BC.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The tutor brings up what he finds a fascinating concept: internal rate of return. The way I understand it, the internal rate of return is the interest rate that would make possible an exact sequence of deposits and withdrawals, with …<\/p>\n

    Financial math: Hewlett-Packard 10B: internal rate of return<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[371,90,3],"tags":[533,534,531,1044,1043],"class_list":["post-12278","post","type-post","status-publish","format-standard","hentry","category-business","category-calculator-usage","category-math","tag-hewlett-packard-financial-calculator","tag-hewlett-packard-business-calculator","tag-hp-10b","tag-internal-rate-of-return","tag-irr"],"_links":{"self":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts\/12278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/comments?post=12278"}],"version-history":[{"count":24,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts\/12278\/revisions"}],"predecessor-version":[{"id":12302,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/posts\/12278\/revisions\/12302"}],"wp:attachment":[{"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/media?parent=12278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/categories?post=12278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oracletutoring.ca\/blog\/wp-json\/wp\/v2\/tags?post=12278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}