Cannot be calculated by formula.
Iteration (fancy term for "hit and miss"!) required.
By the way, how did you get 25.488...% ?
69647 / 240000 = .29019.... hence real close to 29%.
Hello everyone, I've been stumped on finding a solution for the following problem and was hoping you could help me out.
I am trying to find the interest percentage for the following problem and the formula for solving it.
The goal is to find the interest rate needed to reach 1,035,479.
Now, the answer to this problem is roughly 25.4882460120608%.Code:Beginning Days Deposits Interest Balance 240,000 0 0 0 240,000 240,000 365 41,514 69,647 351,161 351,161 365 41,514 101,905 494,580 494,580 365 41,514 143,525 679,619 679,619 365 41,514 197,834 918,967 918,967 171 0 116,512 1,035,479
But I can't seem to find a formula to come to this answer.
Any help would be most appreciated.
Thanks Wilmer.
The interest is compounded daily and the following formula is used to calculate the amount of interest in the Interest column.
(APY) Interest amount = (((1 + (Interest Rate/365))^days)*balance)-balance
In the current problem it would look like (((1 + (25.488...%/365))^365)*240,000)-240,000 = 69,647
I'm trying to create a coded function that will do the calculation, so any details on the exact iteration process needed would help.
Well then, that sure makes the problem easier.
Since 69647 as the interest on 240000 for 365 days is a given,
then the effective annual rate = 69647 / 240000 = .2901958....
This rate is achieved by compounding daily, hence:
(1 + i)^365 = 1.2901958
1 + i = 1.2901958^(1/365)
i = 1.2901958^(1/365) - 1 = .0006983...
annual equivalent: .0006983 * 365 = ~.25488
Amen.
Sorry to be going in circles. I keep leaving out important details it seems.
The interest (69647) is not given in the problem I'm trying to solve.
The only known values are the starting value, the days between deposits, the deposit amount, and what they should come to (1,035,479).
The reason the interest is given in my example is because it has been already solved in that instance.
Ahhh...I see...wish you had started off with this!!
As I said before, ITERATION is required.
Have a look here (don't faint!):
www.math.mcgill.ca/~mei/Wei_Wu_Mei.pdf
I'm no expert on the process...so BYE.