by ‘pays 8.5%’ does this mean that it earns 8.5% interest?
#Account Balance
unborn grail
deft sedge
yes
unborn grail
to me it looks like that’s compound interest but i just skim read it
unborn grail
let me see
deft sedge
Suzette
30,000 ((1+.085)^15 – 1 / .085)
30,000 x 28.2322
= $846,966.00
Bridgett
30,000 ((1+.085)^12 – 1 / .085) (1.085)
30,000 x 19.549 x 1.085
= $636,319.95
Suzette accumulated the highest amount.
Suzette
A= $30,000
IR= 8.5% or 0.085
n= 15/2 = 7.5 years
30,000 (1+.085) ^7.5
30,000 x 1.8438
= $55,314.00
Bridgett
A= $30,000
IR= 8.5%, 0.085
n= 15 years
30,000 (1+0.085)^15
30,000 x 3.3997
= $101,991.00
Bridgett accumulated the highest amount.
there
unborn grail
give me a min to work them out
deft sedge
okay thank you
unborn grail
i cant find my calc sorry!
primal cradle
ill do it
deft sedge
okiie
primal cradle
Suzette - 101992.28 - compound interest
Bridgett - 68250 - simple interest
Suzette makes more @deft sedge
it states that suzette interest is compounded but bridgett isnt
deft sedge
can you show me the working
misty carbon
i didnt realise it would be simple interest for the other one
dont even need to do any calc to now whos gonna have more
deft sedge
Suzette = 30000 x 1.085^15 = 101992.28
why is it raised to 15, i thought it would be 7.5
misty carbon
15 years
primal cradle
Bridgett = 8.5/100 = 0.85, 0.85 x 30000 = 2550, then use simple interest formula (P(1+rt) , 30000 + (15x2550)
= 68250
primal cradle
why is it raised to 15, i thought it would be 7.5
Suzette deposits $30,000 at the start of each year for 15 years
primal cradle
yeah thats why the formula is different
its to the power of 15 since it changes each time for 15 years
deft sedge
oh i see
i have a few more similar questions if you dont mind, i've worked them out, i just need clarification
deft sedge
- Assume you took out a 15-year loan of $750,000 to be repaid by monthly payments. The loan has an annual rate of 9% interest. You have paid the loan for 9 years. What is the balance on the loan at that point?
I = 0.09/12 = 0.0075
N = 15 x 12 = 180 periods
Loan = $750,000
Loan Payment:
750,000 = PMT (1 – 1.0075^-180 / .0075)
750,000 = PMT x 98.5934
PMT = 750,000/98.5934 = $7607.00 each month
Loan Balance:
PMT = $7607.00
R = 9%/12 = 0.0075
N = 6 years x 12 = 72 periods
PVA = 7607.00 (1-1.0075^-72 / .0075)
PVA = 7607.00 x 55.4768
PVA = $422,012.02
Loan Balance is $422,012.02
deft sedge
I = 0.09/12 = 0.0075
N = 15 x 12 = 180 periods
Loan = $750,000
Loan Payment:
7...
thats my answer
primal cradle
lemme see if i get that
primal cradle
2. Assume you took out a 15-year loan of $750,000 to be repaid by monthly pay...
does the interest make the loan go back up after each year
thats gonna take a long time to calculate
primal cradle
it should be looks correct but why did you divide 9% interest by 12
deft sedge
because it's and annual rate