Everything HP200LX: Knowledge, Products, Service

9 years, 100's of pages of HP Palmtop Paper, jammed with tips, reviews and how-to's

Most useful, up-to-date Web sites devoted to the HP 200LX

Direct link into 1000's of pieces of Palmtop software

Tips from Our Techs

2008 Catalog
(PDF, 2.6 MB)

Contact Us/About Us

Weekly Palmtop Paper Newsletter
(Palmtop tips, latest happenings, and HP Palmtop Paper Store information)



Privacy Policy

Using Time Value of Money

Using Time Value of Money

I got a good introduction to HP CALC's Time Value of Money (TVM) Application when I recently purchased a new car.

One dealer offered to lease me a car with a Capitalized Cost of $17,700, for nothing down and $224.26 per month for three years. At the end of three years, the car would have a "residual value" of $10,675, and I would be responsible for a processing fee of $325 if I decided to purchase the car at the residual value.

I started up HP CALC on my 100LX and pressed (MENU) Application TVM to get the TVM mode. (On the 95LX, start HP CALC and press (MENU) TVM.) I pressed (MENU) Clear Data (ENTER) to clear the previous TVM problem (on the 95LX press (MENU) Erase Data). I keyed in 36 and pressed (F6) (N) for the Number of periods. I then keyed in 17,700 and pressed (F8) (PV) for the Present Value (Capitalized COST) of the car. I keyed in -224.26 and pressed (F9) (PMT) for the Payment. I keyed in 12 and pressed (F5) (P/YR) for the number of Payments I would make per year. I then entered -10,675 and then pressed (F10) (FV) for the Final (Residual) value. (It took me quite a while to figure out that the residual value of the car needed to be a negative number. This aspect of the TVM application still confuses me, but it is the way it works.)

After all the data was entered, I pressed (F7) (I%/YR) to calculate the effective Interest per year I was being charged on the lease (2.44% per year). To see my total interest costs, I pressed (F2) (Amort), then pressed (F2) (Go) three times. I could now see that the accumulated interest was $1,048.35 over the three years. My total interest ($1,048.35) and processing fee ($325) costs for the lease would be $1,400.35.

Now 2.44% is a very good rate, but because the residual value of the loan is so high after three years, I am paying that interest on a rather large amount of money. I was interested to see what the rate and total interest would be for a "normal" loan in which the $17,700 was completely paid off during the three year period.

I still had 36 as N, 17,700 as PV and 12 as P/YR. I entered 0 and pressed (F10) (FV) to indicate that the final value of the car would be zero (i.e. it would be paid off). If I went the purchase/loan route, I was going to borrow against funds I had in our company savings plan. The effective interest rate of our savings plan can not be calculated accurately in advance, but I estimated it at 5%. I keyed in 5 and pressed (F7) (I%/YR), then pressed (F9) (PMT) to calculate the monthly payment. The result was $530.48. I then pressed (F2) (Amort) and pressed (F2) (Go) three times to calculate the total interest. The total interest was $1,397.63.

At this level the lease option ($1,400.35) and the purchase/loan options ($1,397.63) were about equal, but there was one other consideration. The manufacturer was offering a $1,000 discount to people who had previously owned this brand of automobile. This clearly made the purchase/loan route the preferable one for me.

Another manufacturer offered me the following terms. The Capitalized Cost was $24,000, and the dealer offered a three year lease with payments of $468/month and a residual value of $11,040 at the end of the lease. This works out to an effective rate of 7.23% and a total interest of $3,888.01 over the three year period. This manufacturer obviously was not as interested in selling me a car as the first manufacturer was, and he did not get my business.

iPhone Life magazine

Notice about Palmtop.net
The Palmtop Network with its S.U.P.E.R. (Simply Unbeatable Palmtop Essentials Repository) software is now available under the domain name of hp200lx.net.  

We Buy
We buy used palmtops, working or broken: HP 200LX, HP 100LX and 1000CX.

Copyright 2010 Thaddeus Computing Inc