How to use the BEG and END Functions on the HP12C.
The HP12C calculator defaults to a function that considers periodic cash flow, such as a monthly mortgage payment, to happen at the end of each period. The [END] Function (blue letter under the 8 key on the key pad) sets this function.
When you have a problem to solve with periodic payments, and the payments occur at the beginning of each period, you need to change the function to the [BEG] function. That is the blue letters under the 7 key on the keypad. This tells the calculator to calculate assuming that the periodic payments happen at the beginning of each period instead of the end of each period.
You would use the BEG function when calculating something like a sinking fund where you are building a savings account to achieve a desired balance at the end of the time period. It might be to pay for a new roof at the end of a 10 year expected remaining life of the roof, for example. When you have a savings account, you deposit money at the beginning of each period and the interest begins to accrue at the beginning of the period.
If you have the setting on BEG and you want to build a savings account to $10,000 in ten years with an annual payment at 8% per year interest, you would use these keystrokes:
10000 [PV]
10[n]
8[i]
[PMT] – the display will show -1,379.90 for the annual payment to make at the beginning of each year.
However, if you have that entered into your calculator and change to the END function with these key strokes:
[g] [END]
Then ask for the [PMT]
the number on the display will show -1,490.29 which is a difference of $110.39 per payment.
The reason that it is higher is that with the END function, is that you have one less payment and one less period to earn interest than if you use the BEG function because the first payment would occur at the end of the first year instead of the beginning of the first year.
So when performing a calculation that has periodic payments (using the PMT key) if your periodic cash flows happen at the end of each period, be sure the setting is on END. The display will not show the little characters on the display. If you have payments that occur at the beginning of each period, use the BEG function and when that is set there will be a “BEGIN” in small letters on the display.
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