Thread: 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

Thank you to all.

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

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).

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 !

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).

To approximate i using Excel, take a look at this.