(11C) Purchase or Lease

[Albert Chan]

(09-26-2018 07:37 AM)Gamo Wrote:  An investor has an opportunity to purchase a piece of property for 79,000;
and he would like 13.5% return. He expects to be able to sell it after 10 years
for 100,000 and anticipates the yearly cash flows in the table below:

Year Cash Flow
1 14,000
2 11,000
3 10,000
4 10,000
5 10,000
6 9,100
7 9,000
8 9,000
9 4,500
10 100,000

... NPV is 907.77

What is the actual NPV (with all digits) ?
Exact NPV (10 places) should be 907.76893 37698

HP-12C, Horner's for NPV (cash-flow input in reverse)
Multiply flipped rate => 907.76891 00
Divide discount rate => 907.76893 00

HP-12C, Horner's for FV, then back to NPV => 907.76892 51

HP-12C build-in CFj/Nj code => 907.76893 37 ... Amazingly Good

How does HP-12C code get it so close ?
My guess is calculations all done in 13 internal digits, only 1 rounding for the NPV result ...