# Isolate Nominal Interest Rate (GENIUS PLZ!!)

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• Nov 24th 2008, 03:59 PM
mgoy_11
Isolate Nominal Interest Rate (GENIUS PLZ!!)
Ok, so I have a simple question for all :

I have the following formula:

PV= a (1-(1+i)^-n) / i

How can I isolate "i".... no pun intended(Itwasntme)

Thank you to all.
• Nov 24th 2008, 05:36 PM
mr fantastic
Quote:

Originally Posted by mgoy_11
Ok, so I have a simple question for all :

I have the following formula:

PV= a (1-(1+i)^-n) / i

How can I isolate "i".... no pun intended(Itwasntme)

Thank you to all.

You cannot in general solve for i algebraically. For particular values of P, V a and n you will generally have to get an approximate value for i using technology (such as a graphics calculator).
• Nov 24th 2008, 06:09 PM
mgoy_11
Quote:

Originally Posted by mr fantastic
You cannot in general solve for i algebraically. For particular values of P, V a and n you will generally have to get an approximate value for i using technology (such as a graphics calculator).

You say in general.....
Meaning that in CAN be done... know how ?

Thanks again !
• Nov 24th 2008, 06:21 PM
mr fantastic
Quote:

Originally Posted by mgoy_11
You say in general.....
Meaning that in CAN be done... know how ?

Thanks again !

No. Meaning that in general it can't be done. There may be some lucky set of values for P, V, a and n for which it can be done but in general it can't. That's just the way it is (unless you have knowledge of the Lambert W-function).
• Nov 25th 2008, 07:32 AM
jonah
To approximate i using Excel, take a look at this.