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Math Help - Present Value, Future Value, Rate

  1. #16
    is up to his old tricks again! Jhevon's Avatar
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    Quote Originally Posted by neverlosehope View Post
    If a person borrowed $2000 at 15%on the first of June 2000 to pay it in two equal times: the first on December 1st, 2000 & the other on June 1st,2001 & if the datum date was June 1st,2000. Calculate the value of each payment
    X??
    p= m/(1+rt) ...........this is the formula given

    2000= X/(1+0.15*6/12) + X/(1+0.15*12/12) ....the interest is applied per year. we have 2 payments, one is after 6 months, the other is after a year. 6 months is 6/12 of a year (since we have 6 out of 12 months--so it's half a year), so we plug in 6/12 for t in the first part. 12/12 means 12 months out of 12 months, which is just one, so that's when the interest is applied after one year, so we put that for t in the second part of the formula. 15% = 0.15 as i explained earlier, so that is what we plug in for r in both parts of the formula. and now we just need to solve for x

    we get,

    2000 = x/1.075 + x/1.15 ........adding these fractions we get
    2000 = 1.799797776x

    => x = 2000/1.799797776 = 1111.24

    if the datum date was changed to be 1/6/2001.calculate the value of each payment.
    M= p(1+rt)
    M= 2000 (1+0.15*1)= 2300
    So, 2300 = X (1 + 0.15 * 6/12) + X
    2300=2.075 X
    X= 1108.43

    .....here we just applied the formula with p = 2000, t = 1 since it's after 1 year, r = 0.15 = 15% and solved for x



    for the first: x/1.075 + x/1.15 = x(1/1.075 + 1/1.15) if we factor out the x

    so we just add the numbers in the brackets to get the coefficient of x, and then we divide both sides by that number to get x by itself on one side of the equation
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  2. #17
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    So, 2300 = X (1 + 0.15 * 6/12) + X
    2300=2.075 X

    X= 1108.43

    I can understand that part
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  3. #18
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    we got the answer here:
    M= p(1+rt)
    M= 2000 (1+0.15*1)= 2300


    this after one year

    so, why we did this step:
    So, 2300 = X (1 + 0.15 * 6/12) + X
    2300=2.075 X
    X= 1108.43


    I can understand that part
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  4. #19
    is up to his old tricks again! Jhevon's Avatar
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    Quote Originally Posted by neverlosehope View Post
    So, 2300 = X (1 + 0.15 * 6/12) + X
    2300=2.075 X

    X= 1108.43

    I can understand that part
    here the interest is applied after the 6 month period, so only the first payment would be affected by the interest. since the second payment is 6 months after that, interest would not be applied to it. so if x is the amount we pay each time, we add the interest the first time, and no interest the second time

    these are weird questions though
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  5. #20
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    ok i understand that but, i think we don't need to write this step in the exam right?
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  6. #21
    is up to his old tricks again! Jhevon's Avatar
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    Quote Originally Posted by neverlosehope View Post
    ok i understand that but, i think we don't need to write this step in the exam right?
    i believe so, yes. they used it to get to the answer after all.
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  7. #22
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    Smile

    I don't really what to say thank you soooooo much i have an exam after few hours so thank you soo much
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  8. #23
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    Quote Originally Posted by neverlosehope View Post
    I don't really what to say thank you soooooo much i have an exam after few hours so thank you soo much
    well, good luck with that.

    business math is wierd ...kind of like some of the math in economics
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  9. #24
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    The exam problems:
    simpe interest
    present value
    value equation
    compoud interest
    discount
    partial paument(Usa rule)
    Anuitties
    Amortization & amortization schedual

    But, i think every thing is gonna be fine
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  10. #25
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    Wowwwwwwwwwwwwwwwwww

    It's my last Exammm
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  11. #26
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    Smile Q

    Can you tell me how to solve these kind of problems
    How to differetiate between the M & P
    & when i read the problem what's the first thing i have to think of.
    THanks
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  12. #27
    is up to his old tricks again! Jhevon's Avatar
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    Quote Originally Posted by neverlosehope View Post
    Can you tell me how to solve these kind of problems
    How to differetiate between the M & P
    & when i read the problem what's the first thing i have to think of.
    THanks
    P is for Principal. it is the original amount that we started with. So in your last question, P was the 2000 that was borrowed

    M is for aMount, it is the amount we get after the interest is applied over some period of time
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  13. #28
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    OK all the problem i have read
    it'a ll about a person indebted or signed a loan for $.... that was due it's m
    & all the problems that say a person borrowedn on whatever any day it's p
    is that a standred
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  14. #29
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    Quote Originally Posted by neverlosehope View Post
    OK all the problem i have read
    it'a ll about a person indebted or signed a loan for $.... that was due it's m
    & all the problems that say a person borrowedn on whatever any day it's p
    is that a standred
    No, P is what was borrowed and M is what is due
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  15. #30
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    OK all the problem i have read it'a ll about
    a person indebted or signed a loan for $.... that was due it's p & we need to get m
    & all the problems that say a person borrowedn on whatever any day it's m & we need to get p


    is that a standred
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