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Math Help - Compound discount question

  1. #1
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    Compound discount question

    Edit: I have figured out how to solve this problem

    "An account with initial amount $B earns compound interest at an annual effective interest rate i. The interest in the third year is $426, and the discount in the seventh year is $812. Find i."

    I know how to solve this problem with a graphing calculator or program that can solve variables, but I'm only allowed to use a regular calculator on the upcoming test. How can I set up the equations in this problem to solve for i in a minimal amount of time?
    Last edited by paulrb; October 16th 2008 at 04:24 PM.
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  2. #2
    Member jonah's Avatar
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    <br />
F = P\left( {1 + i} \right)^n  \Leftrightarrow i = \left( {\frac{F}<br />
{P}} \right)^{\frac{1}<br />
{n}}  - 1 = \sqrt[n]{{\frac{F}<br />
{P}}} - 1<br />
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  3. #3
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    Thank you for trying to help, but what you posted is already familiar to me.

    My problem is trying to set up a system of equations from which I can solve for i on paper (a numerical answer for i). I can't find a strategy to solve that works on paper without taking a very very long time.
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