The example in the text book on present value asks how much would you need to deposit today to end up with $2,000,000? The example on the homework is easier.
Continue reading “How Do You Calculate Present Value in an Annuity?”
The example in the text book on present value asks how much would you need to deposit today to end up with $2,000,000? The example on the homework is easier.
Continue reading “How Do You Calculate Present Value in an Annuity?”
In Section 5.3, you are asked to find the rate in a sinking fund. Using the ordinary annuity formula results in an equation that is very difficult to solve. Instead, try graphing each side to the equation and locating the point of intersection.
Many problems require you to work with the compound interest formula.
Here are some FAQs that might help you to solve for various quantities in the formula.
You can solve for any constant in the compound interest formula
In an earlier FAQ, we looked at solving for the rate r. In the FAQ below, we look at how logarithms can be used to solve for the number of years, n, in the power.
The compound interest formula has several constants in it. If you are given all but one of these constants, you can solve for the remaining constant.
In this FAQ, we look at solving for the rate r using roots.