3. REFM HP 12c Calculator Skills Certification
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• Only $29.00
• Available online 24/7/365
• 15 questions in 30 minutes
• Instant Results, Instant Resume Builder!
• The test covers a few additional advanced topics, so
you should download our Free Self‐Study Guide to
prepare
www.GetREFM.com 3
4. HP 12c Overview
• Market Standard since 1981 in:
• Real Estate
• TO EDIT
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• Design standard
• Most of the keys are multi‐function
• The key functions are color‐coded (white, orange,
blue)
• A “reverse” keying order is used, and is a little
strange at first
• Negative values reported can be confusing
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5. Today’s Agenda
1. Financial Registers
2. Simple and Compound Interest
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3. Periodic and Annual Interest Rates
4. Nominal and Effective Interest Rate Conversion
5. Present Value (PV) and Future Value (FV)
6. Net Present Value (NPV)
7. Internal Rate of Return (IRR)
8. Loan APR with Fees
9. Mortgage Pricing
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7. Color‐Coded Formatting Used In Our Materials
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• [n] or [X] or [100] = the white default key values
• [f][NPV] = orange values associated with the keys
• [g][END] = blue values associated with the keys
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8. Financial Registers
• What they are:
• Dedicated places in the calculator’s
memory to store data values for use in an
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ongoing calculation
• Financial Registers are a subset of the
calculator’s overall Storage Registers
• Application:
• Recalling values during lengthy calculations
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10. Simple Interest on a 360‐ or 365‐Day Basis
• What it is:
• Interest that is calculated in each period off
the beginning of period account balance,
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where the account balance does not include
any interest earned
• 360‐day basis is the default with the 12c
• Application:
• To calculate how much interest is being
earned by a lender over a specific time
period
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13. Compound Interest
• What it is:
• Interest that is calculated in each period off
the beginning of period account balance,
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where the account balance does include any
unpaid interest earned
• Application:
• To calculate how much interest is being
earned by a lender over a specific time
period, where interest compounds monthly,
quarterly, or annually
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18. Periodic and Annual Interest Rates
• What it is:
• The rate of interest on a loan expressed
either annually or in another interval that is
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more frequent than annually (e.g., monthly)
• Application:
• To back solve for what interest rate is
needed, given a frequency of compounding,
to produce a future value of a given
investment amount
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21. Nominal Rate to Effective Rate Conversion
• What it is:
• The annual interest rate in name e.g., “an
8% annual interest rate”
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• When interest compounds, nominal rate <
effective rate
• Application:
• To find out what rate of annual interest one
is truly paying on a compounding loan
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24. Effective Rate to Nominal Rate Conversion
• What it is:
• Annual interest rate in name, e.g., “an 8%
annual interest rate” is the nominal rate
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• When there is compounding, the effective
rate is the actual cost
• Nominal rate < effective rate
• Application:
• To find out what rate of nominal annual
interest one is paying on a compounding
loan
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27. Weighted Average Calculation
• What it is:
• The average of a series of values in which
each quantity to be averaged is assigned a
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weight
• Application:
• To find out the average price paid per lot for
land to be developed into a housing
subdivision
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31. Discounting Cash Flows: Net Present Value/IRR
• What it is:
• NPV: The net value, in today’s dollars, of an
investment opportunity
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• IRR: the average annual return on the
investment as measured through the final
cash flow
• Applications:
• To value the acquisition of an existing
income‐producing office building or retail
plaza; To determine investment performance
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36. Annual Percentage Rate Calculations with Fees
• What it is:
• APR is the calculated rate for a mortgage that
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accounts for the cash fees paid by the
borrower
• Application:
• Calculate exactly what a loan is costing a
borrower on an annual basis
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40. Mortgage Acquisition Pricing
• What it is:
• Mortgages that are sold instead of held by
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the issuer are typically done so either at a
discount or a premium to the remaining
principal balance
• Application:
• Calculate a mortgage purchase price given a
targeted (desired) yield amount
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43. Mortgage Acquisition Yield
• What it is:
• Mortgages that are sold instead of held by
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the issuer are typically done so either at a
discount or a premium to the remaining
principal balance
• Application:
• Calculate an expected yield amount for a
targeted mortgage purchase price
www.GetREFM.com 43
46. REFM HP 12c Calculator Skills Certification
CLICK TO EDIT MASTER TITLE STYLE
• Only $29.00
• Available online 24/7/365
• 15 questions in 30 minutes
• Instant Results, Instant Resume Builder!
• The test covers a few additional advanced topics, so
you should download our Free Self‐Study Guide to
prepare
www.GetREFM.com 46