Thread: Compound Interest problem..please help..

Hello guys..please help me on this..I've been doing this question for 3 days..ahahaha!

A tin mine is estimated to have tin reserves worth two million dollars. If the monthly extraction is 5% of the value of the reserve the month before, find the value of the tin reserves after two years.

I know if I use the geometric progression, I'll get the answer somewhere around 583978.05 and I guess that's the right answer but I have to use compound interest formula..I think maybe it's present value formula...but I'm totally lost..please help...

Sounds like you're already there. With the amount remaining at the end of any month being 95% of the amount at the end of the previous month,

= 583,978, as you've computed. Relating that to the typical PV / FV equation, think of the 0.95 as (1 + r), where r is the -5% "growth" rate (negative growth, in this case).

ohh...yeah..my mistakes is so small that I can fail this subject..

I've been doing this ---> 2M x (1 + [5%/12])^-24

I dunno what I'm doing actually..

But millions of thanks...I really appreciate it..thank you