Re: HP 17BII Message #23 Posted by Peter A. Gebhardt on 26 Feb 2009, 6:33 a.m., in response to message #21 by Peter Leyssens
Peter,
This special German extension to the "Annuity" (classic TVM) menu on the HP17bII International ROM is because of the different requirements within the classical accounting used by German banks (only?).
Differently to the e.g. US way of reckognizing compounded interest (the TVM way), German banks add up linear interest per day and account for compounding effects only once a year.
Therefore the TVM method does not represent the accounts balance within a year exactly! Think of a passbook (savings account)where the STAFF method makes sense, because taking care of interest on savings/withdrawals with simple multiplication was easier in the days before the calculator revolution.
The way interest was calculated then: 10% interst per year divided by 360 (accounting) days then multiplied by the number of days a balance was bearing interest on that account.
Best regards,
Peter A. Gebhardt
PS: Look up the term "capitalized simple interest" here
http://www.margill.com/InterestcalculationWhitepaper.htm
Edited: 26 Feb 2009, 7:15 a.m.
