To
enter
a guess:
1.
Ke
y
in
an
estimate of IRR%.
2.
Press I STO 1
11m
.
When
it is calculating IRR% using a guess you've entered,
the
HP-18C
displays
the
current estimate
of
IRR%
and
the
calculated
value
of
NPV
for each iteration. The calculation halts
when
the
HP-18C
finds
an
answer
near
your guess. However, there
may
be
additional
positive or negative answers
or
there
may
be
no
solution.
You
can
continue
searching for
other
solutions
by
halting
the
calcula-
tion
and
entering a different guess.
One
way
to obtain a
good
guess for IRR% is to calculate
NPV
for
various interest rates
(1%)
. Since IRR% is
the
interest rate
at
which
NPV equals 0,
the
best estimate
of
IRR% is
the
interest rate
that
yields
the
value for NPV closest to
O.
To
find a good estimate for IRR%, key
in
a guess for IRR%
and
press
..
. Then, press
..
to calculate NPV for
that
value. Repeat
the
calculation
of
NPV
for several values
of
1%,
and
look for trends
in
the
results. Choose as your guess for IRR%
the
value
of
1%
that
produces
an
NPV
closest to O.
Solver Calculations
In most cases,
the
solver calculates
and
displays
the
answer to your
problem, because there is only
one
correct answer
and
the
formula is
easy for
the
solver to interpret. However,
the
solver is capable
of
han-
dling
a
wide
variety
of
complex
mathematical
conditions. In order for
you to use all
the
calculating
power
included
in
the
solver, it will
be
helpful to you to
understand,
in
a general way,
how
it works.
B:
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About
HP-18C
Calculations
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