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Math Help - Isolate Nominal Interest Rate (GENIUS PLZ!!)

  1. #1
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    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.
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  2. #2
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    Quote Originally Posted by mgoy_11 View Post
    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).
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  3. #3
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    Quote Originally Posted by mr fantastic View Post
    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 !
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  4. #4
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    Quote Originally Posted by mgoy_11 View Post
    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).
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  5. #5
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    To approximate i using Excel, take a look at this.
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