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#1 2013-02-20 07:40:47
- vatso
- Novice
Offline
Time Value of Money
1) What is the accumulated value of $150 invested for three years and three months when the rate of interest is 0.5% per month? The right answer is $182.21. How to you get to that figure?
2) $100 invested for two years at an interest rate of 2% per quarter. What is the difference between the compound and simple interest earned on this investment? The correct answer is $1.17. How you get this value?
3) What is the future value of £100 invested at 1% per month for five years? The correct answer is $181.67. How do you get that value?
Again, thank you in advance!!!!
#2 2013-02-20 14:12:02
- bobbym
- Administrator
Online
Re: Time Value of Money
Hi vatso;
Simplest way is to form the recurrence
with a(0) = 150. Then you just run the recurrence forward for 39 months. Answer is 182.20809 which when rounded is 182.21
From the recurrence you can also get a formula:
Question 3) is done the same way.
Last edited by bobbym (2013-02-20 14:34:31)
In mathematics, you don't understand things. You just get used to them.
90% of mathematicians do not understand 90% of currently published mathematics.
I am willing to wager that over 75% of the new words that appeared were nothing more than spelling errors that caught on.
#4 2013-02-21 00:53:19
- bobbym
- Administrator
Online
Re: Time Value of Money
Hi vatso;
You are welcome and welcome to the forum.
In mathematics, you don't understand things. You just get used to them.
90% of mathematicians do not understand 90% of currently published mathematics.
I am willing to wager that over 75% of the new words that appeared were nothing more than spelling errors that caught on.