Results 1 to 6 of 6

Math Help - Compound Interest

  1. #1
    Newbie
    Joined
    Jul 2012
    From
    london
    Posts
    2

    Compound Interest

    I am currently working on mastering mathematics book and wanted to brush up on my maths, since it has been nearly 15years i have tried mathematics. I am struggling with a problem. Hope someone would help me with solving this.
    Question:
    Roy invests 1000pounds on 1jan1996 and every 1jan until 1jan2006. Interest at 8%per annum is calculated at31december each year on the total value of his investment(including any earned interest). What will be the value of his investment on 31 december 2006?
    I have found the answer to that i got to be different from the answer at the back of the text and wanted to know if i am right. So i need a bit of a help.

    Thank You

    Kat
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Senior Member
    Joined
    Mar 2012
    From
    Sheffield England
    Posts
    440
    Thanks
    76

    Re: Compound Interest

    Quote Originally Posted by psykat09 View Post
    I am currently working on mastering mathematics book and wanted to brush up on my maths, since it has been nearly 15years i have tried mathematics. I am struggling with a problem. Hope someone would help me with solving this.
    Question:
    Roy invests 1000pounds on 1jan1996 and every 1jan until 1jan2006. Interest at 8%per annum is calculated at31december each year on the total value of his investment(including any earned interest). What will be the value of his investment on 31 december 2006?
    I have found the answer to that i got to be different from the answer at the back of the text and wanted to know if i am right. So i need a bit of a help.

    Thank You

    Kat
    1000*(1.08)^11
    Follow Math Help Forum on Facebook and Google+

  3. #3
    MHF Contributor
    Joined
    Oct 2009
    Posts
    5,417
    Thanks
    718

    Re: Compound Interest

    Quote Originally Posted by biffboy View Post
    1000*(1.08)^11
    This does not account for investing additional $1000 every January 1.

    Quote Originally Posted by psykat09 View Post
    Roy invests 1000pounds on 1jan1996 and every 1jan until 1jan2006. Interest at 8%per annum is calculated at31december each year on the total value of his investment(including any earned interest). What will be the value of his investment on 31 december 2006?
    Do you need an analytical formula or a numerical answer? Do you have to calculate it by hand, using a calculator, or using software? If you are using Excel or LibreOffice, do you need to use built-in functions or set up your own formulas?

    Quote Originally Posted by psykat09 View Post
    I have found the answer to that i got to be different from the answer at the back of the text and wanted to know if i am right.
    It's a good idea to show your work so that we can discuss it. In fact, the forum rules say that you need to show some work or describe the difficulty you are having.
    Follow Math Help Forum on Facebook and Google+

  4. #4
    Senior Member
    Joined
    Mar 2012
    From
    Sheffield England
    Posts
    440
    Thanks
    76

    Re: Compound Interest

    My mistake. Must read the questions more carefully!
    So answer will be 1000*(1.08)^11 +2000*(1.08)^10 +3000*(1.08)^9...........+11000(1.08)
    Last edited by biffboy; July 4th 2012 at 06:00 AM.
    Follow Math Help Forum on Facebook and Google+

  5. #5
    Newbie
    Joined
    Jul 2012
    From
    london
    Posts
    2

    Re: Compound Interest

    I tried this problem by using the formula I=P(1=R/100)^n
    I found the answer to be 21589.249
    It is however different from the answer at the back of the book which is 1797713
    Follow Math Help Forum on Facebook and Google+

  6. #6
    MHF Contributor
    Joined
    Oct 2009
    Posts
    5,417
    Thanks
    718

    Re: Compound Interest

    Quote Originally Posted by psykat09 View Post
    I tried this problem by using the formula I=P(1=R/100)^n
    Just like post #2, this does not take into account additional investments of $1000 every January 1.

    You have not responded to questions in post #3.
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Compound interest.
    Posted in the Business Math Forum
    Replies: 3
    Last Post: January 5th 2012, 09:26 AM
  2. Compound interest at changing interest rates
    Posted in the Business Math Forum
    Replies: 2
    Last Post: October 21st 2010, 04:55 AM
  3. Compound Interest
    Posted in the Algebra Forum
    Replies: 1
    Last Post: March 23rd 2009, 04:25 PM
  4. Compound Interest
    Posted in the Math Topics Forum
    Replies: 1
    Last Post: December 2nd 2008, 11:44 AM
  5. Compound Interest Q Help!
    Posted in the Business Math Forum
    Replies: 1
    Last Post: June 10th 2008, 06:31 AM

Search Tags


/mathhelpforum @mathhelpforum