# high exponentials

• Aug 26th 2008, 06:07 PM
Kerry
high exponentials
250,000(1+i)^15 = 51,200((1+i)^15 -1)/i)

solve for i.

Is there a simple step I'm missing to make solving for i easier??

(this comes from setting two future value equations equal to one another to determine at what interst rate a lifetime annuity = a lump sum...

FV=PV(1+i)^n=PMT((1+i)^15 -1)/i) where PV = the lump sum of 250,000 and PMT = lifetime annuity of 51200 and i is the interest rate). The answer is 24.83% (thanks to trial and error), but I am trying to get there algebraically...

THANKS for any ideas!
• Aug 26th 2008, 06:36 PM
Jhevon
Quote:

Originally Posted by Quick

so we're reserving our spot now? :p

don't worry about it, Quick. I know the pain of responding only to realize that someone (or several someones) posted before you
• Aug 26th 2008, 06:41 PM
Quick
Quote:

Originally Posted by Jhevon
so we're reserving our spot now? :p

don't worry about it, Quick. I know the pain of responding only to realize that someone (or several someones) posted before you

actually what happened was that I looked at the problem wrong (I said "Do you know about logarithms?"), thinking that the answer was a simple logarithm problem. Then I saw it wasn't so I quickly edited it so that I could post an actual answer, and then I just deleted it, because I've got school tomorrow and I need to sleep (It's 10:42 for me right now).