This is a finance question - PVIFA
575 = (1-1/(1+r)^12)/r)×50
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This is a finance question - PVIFA
575 = (1-1/(1+r)^12)/r)×50
Since 'x' is not in the equation, I guess it can be anything you like!
NonTrivial exercise. Try this:
1) Solve for one fo the 'r's and take a good guess.
You THINK the answer might be around 8% Annual, so give a good try of r = 0.006434
f(0.006434) = 0.006441 -- I am delighted that it was so close. Do it again.
f(0.006441) = 0.006448 -- A little disappointing. It moved 7. Do it again.
f(0.006448) = 0.006455 -- Ack. It moved 7 again!
Well, it's not winning any awards for convergence, but it is getting there. Get a computer program to do more iterations. After a few hundred, it settles down to r = 0.00660 91533 89984 (Sorry, I don't know how to shut off Skype) which leads to an annual rate of around 8.225725%.
That's one way to go about it. There are others.
I don't understand what you mean by, "solve for one of the R's"Quote:
Originally Posted by TKHunny
Since 'x' is not in the equation, I guess it can be anything you like!
NonTrivial exercise. Try this:
1) Solve for one fo the 'r's and take a good guess.
You THINK the answer might be around 8% Annual, so give a good try of r = 0.006434
f(0.006434) = 0.006441 -- I am delighted that it was so close. Do it again.
f(0.006441) = 0.006448 -- A little disappointing. It moved 7. Do it again.
f(0.006448) = 0.006455 -- Ack. It moved 7 again!
Well, it's not winning any awards for convergence, but it is getting there. Get a computer program to do more iterations. After a few hundred, it settles down to r = 0.00660 91533 89984 (Sorry, I don't know how to shut off Skype) which leads to an annual rate of around 8.225725%.
That's one way to go about it. There are others.
Essentially you have to converge on a solution largely by guessing.Quote:
Originally Posted by NeedsHelpp
solve 575 = (1-1/(1+r)^12)/r)×5 0 - Wolfram|AlphaQuote:
Originally Posted by NeedsHelpp