The HP12-C financial calculator is a powerful little tool, and, if used correctly, can still be extremely useful for real estate professionals. It’s important to have a practical understanding of the HP12-C and its applications. I have compiled a list of simple calculations where the HP12-C will come in handy. ……………………………………………………… ………………………………………………………………………………. ……………………… …………………………………………………………….
It’s a great instrument for calculating simple values, such as the future value of a single sum (FVSS):
The future value of an annuity (FVA):
You can easily determine the amount you need to deposit into a sinking fund (SFP) to reach a desired return.
The present value of a single sum (PVSS):
The present value of an annuity (PVA):
The monthly payments of a mortgage (ITA).
You can quickly calculate yields and IRR’s:
You can also calculate the present value (PV) even when deposits vary year to year or month to month:
The HP12-C calculator is a very valuable tool if used correctly, however it has a few pitfalls. I don’t suggest using the HP12-C when calculating more complicated problems such as finding the effective cost of a loan with points. I suggest using excel for the more difficult problems for a few reasons. First, it’s very easy to mistype a digit on the calculator, yet there is not way to delete or view your work. Therefore, your prone to dumb mistakes. Also, on excel, you can view a whole series of payments which makes it easier to visualize the investment and make necessary changes.
In conclusion, I suggest that every real estate professional have a working knowledge of the HP12-C, but shouldn’t rely too heavily on its capabilities. Excel is far more valuable and powerful tool. Next week I will begin a series on excel for real estate professionals. The capabilities of excel are extraordinary, and it’s imperative for all real estate professionals to have a strong understanding of its functionality.
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