Solve for loan payment variables

• Jan 14th 2010, 10:48 AM
Lobster
Solve for loan payment variables
I am trying to figure out a way to solve for the unknowns in a given payment formula.

I would like to solve for i, P, and n. I don't know how to alter the formula to do this? Can someone help me?

With my basic math background I have tried to isolate the variables, but I keep doing something incorrect, because my solutions never prove correct.
• Jan 14th 2010, 10:53 AM
Roam
Quote:

Originally Posted by Lobster
I am trying to figure out a way to solve for the unknowns in a given payment formula.

I would like to solve for i, P, and n. I don't know how to alter the formula to do this? Can someone help me?

With my basic math background I have tried to isolate the variables, but I keep doing something incorrect, because my solutions never prove correct.

When you want to solve for i, you first multiply both sides by $1-(1+i)^{-n}$

$A= \frac{Pi}{1-(1+i)^{-n}}$

you get:

$A(1-(1+i)^{-n}) = P i$

Then divide both sides by P:

$i = \frac{A(1-(1+i)^{-n})}{P}$

You apply the same method to find an expression for P and n. The expression for P is very similar to i, except that you have an "i" in the denominator instead of a "P".
• Jan 14th 2010, 11:07 AM
Calculus26
See attachment