# Simplification :)

• Apr 20th 2011, 02:10 PM
ffezz
Simplification :)
Hello
I'm having trouble solving this daily interest rate conversion. I know the sollution because Maple does it for me but i cant get to it myself which drives me nuts. heres what i have so far
1.07 = (1+R)^365
ln 1.07 = 365 ln (1+R)
ln1.07/365 = ln (1+R)
now how do i get rid of the ln on the right?
thank you, chris
• Apr 20th 2011, 02:29 PM
pickslides
ln(1.07)/365 = ln (1+R)

e^(ln(1.07)/365) = e^(ln (1+R))

e^(ln(1.07)/365) = 1+R

finish him off.
• Apr 20th 2011, 04:06 PM
Wilmer
Quote:

Originally Posted by ffezz
1.07 = (1+R)^365

RULE: if a^p = b then a = b^(1/p)

So 1 + R = 1.07^(1/365)
• Apr 20th 2011, 04:08 PM
pickslides
Quote:

Originally Posted by Wilmer
RULE: if a^p = b then a = b(1/p)

Or maybe if a^p = b then a = b^(1/p)?
• Apr 20th 2011, 04:51 PM
Prove It
Quote:

Originally Posted by ffezz
Hello
I'm having trouble solving this daily interest rate conversion. I know the sollution because Maple does it for me but i cant get to it myself which drives me nuts. heres what i have so far
1.07 = (1+R)^365
ln 1.07 = 365 ln (1+R)
ln1.07/365 = ln (1+R)
now how do i get rid of the ln on the right?
thank you, chris

You only use logarithms to solve for exponents. In this case, to undo a power, take both sides to the reciprocal power.
• Apr 20th 2011, 05:40 PM
ffezz
Haha thanks guys :) I got both methods. Now i remember how to use e^x and can also convert between interst rates without doing complicated algebra with the oh so neat reciprocal rule that i did not remember :D
thank you
Chris
• Apr 20th 2011, 07:48 PM
ragnar
Quote:

Originally Posted by pickslides
finish him off.

I like this. :)
• Apr 24th 2011, 11:24 AM
naikn05
Quote:

Originally Posted by Wilmer
RULE: if a^p = b then a = b^(1/p)

So 1 + R = 1.07^(1/365)

I think it's supposed to be 1 + R = 1.07 / 365 right? Since you raised both sides to the exp it cancels out the ln.
• Apr 24th 2011, 06:38 PM
Prove It
Absolutely not.

(1 + R)^365 = 1.07

[(1 + R)^365]^(1/365) = (1.07)^(1/365)

1 + R = (1.07)^(1/365).
• Apr 24th 2011, 07:20 PM
naikn05
Quote:

Originally Posted by Prove It
Absolutely not.

(1 + R)^365 = 1.07

[(1 + R)^365]^(1/365) = (1.07)^(1/365)

1 + R = (1.07)^(1/365).

My mistake. Thank you for clarifying.