Math Is Fun Forum

muxdemux

Member

Registered: 2012-12-23

Posts: 80

Finding the Compound Interest Rate

Given a loan amount L, a term Y (in years) and a fixed monthly repayment P, I want to find (or at least approximate) the compound interest rate R. The loan is compounded monthly, once before each payment.

I've looked into geometric series, though it isn't too easy to solve for the ratio.

I'm using a computer to find the interest rate, so iterative methods are fine.

bobbym

bumpkin

From: Bumpkinland

Registered: 2009-04-12

Posts: 109,606

Re: Finding the Compound Interest Rate

Hi;

Nothing from here could help?

http://en.wikipedia.org/wiki/Compound_interest

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In mathematics, you don't understand things. You just get used to them.
If it ain't broke, fix it until it is.
Always satisfy the Prime Directive of getting the right answer above all else.

muxdemux

Member

Registered: 2012-12-23

Posts: 80

Re: Finding the Compound Interest Rate

Thanks for your help, bobbym. I think I misspoke; I wanted the interest rate of an amortized loan.

Anyway, I was able to find an approximation method here.

bobbym

bumpkin

From: Bumpkinland

Registered: 2009-04-12

Posts: 109,606

Re: Finding the Compound Interest Rate

Hi muxdemux;

I am glad found that. It is a nice page.

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In mathematics, you don't understand things. You just get used to them.
If it ain't broke, fix it until it is.
Always satisfy the Prime Directive of getting the right answer above all else.