In business schools throughout the country, in board rooms, war rooms, and on exam day for the Chartered Financial Analyst certification, the HP 12c is the most widely used financial calculator. It has withstood the test of time. Hewlett-Packard created a financial calculator in 1981 that remains the industry standard and is recognized as an essential tool for any financial professional. They made it easy to use so that, with a little practice, the average person can quickly perform basic financial calculations.
What Calculations Does the HP 12C Perform?
The HP 12C will perform all of the basic financial calculations like Annual Percentage Rate, Net Present Value, and Internal Rate of Return quickly and efficiently. It also calculates weighted average, interest, standard deviation, cash flow, and a host of other functions. When you buy the HP 12C, it comes with a fantastic user manual full of sample calculations, tables, and charts that walk the user through examples of how to use the tool much like a textbook walks you through financial principles.
How Long Will the HP 12C Financial Calculator Last?
It’s hard to say, but odds are that you’ll be able to pass a working model on to your grandchildren. Senior investment bankers typically carry the one that they bought in college around in their front pocket and if you look closely you’ll see that the color has changed slightly from wear and tear. Count on using this calculator for at least fifteen years but don’t be surprised if it runs for another twenty after that. High School students utilize this calculator and end up keeping it throughout their careers.
How Fast Is The Calculator?
Not very. A simple amortization of interest over the life of a loan can take well over a minute. Interestingly, HP surveys convinced the company to keep an older processor because users didn’t trust the answer if the calculator produced it quickly. So the slow speed is part of the reason that the calculator has retained it’s popularity. The original 12C is slower than the latest and greatest model but HP has updated the 12C Platinum Financial Calculator, which retains all of the great features of the original but adds more functionality and faster processing. It also has more data storage.
What Operating System Does the HP 12C use?
The 12C uses the Reverse Polish Notation (RPN) versus the more typical Algebraic Operating System. RPN takes a bit of time to master, but will become second nature. To multiply two and three in RPN, the sequence is: 2 <enter key> 3 <multiply key>. It is simply in theory but takes time to adjust for those used to the AOS (2 x 2 =) sequences. The programming logic is the same as a macro operation on a computer. The simple logic makes programming easy and intuitive, adding to the popularity of this financial calculator. There are 99 lines of programming available in the original 12C and 400 lines in the Platinum version.
Are there any other good reasons to buy an HP 12C?
The interface is user friendly and hasn’t changed much in the past twenty years, but don’t be fooled by the dated appearance. The tactile feel that comes when you press the buttons also seems outdated to the touch screen generation, but this feature gives the user additional confidence during data entry.
The HP 12c has been the industry since its introduction in 1981. The processing speed is slightly slower than more modern financial calculators, however the intuitive programming logic, RPN operating system, and industry wide usage make this an essential tool for the prospective finance professional.
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