Solution 11285: Interest Conversions on the BA Real Estate™.
How can I perform interest conversions on the BA Real Estate?
The NOM, EFF, PDS/YR functions are used to perform conversions between nominal and effective rates. The examples below will demonstrate how to use these functions.
What would the nominal rate with quarterly compounding have to be to yield an annual effective rate of 16%:
• Enter 16 and press [2nd] [EFF].
• Enter 4 and press [2nd] [PDS/YR].
• Press [CPT] [2nd] [NOM].
The computed nominal rate is 15.12.
Convert a 15% nominal interest rate with quarterly compounding to the equivalent annual effective interest rate:
• Enter 15 and press [2nd] [NOM].
• Enter 4 and press [2nd] [PDS/YR]
• Press [CPT] [2nd] [EFF].
The computed effective rate is 15.87.
Please see the BA Real Estate guidebook for additional information.