nslesin
Can someone assist me with this problem please.
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nslesin
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ganeshie8
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use the compound interest formula
\(\large A = P(1+\frac{r}{n})^{nt}\)
\(P\) = 200
\(r\) = 3% = 0.03
\(n\) = 12 (months)
\(t\) = 10 (years)
ganeshie8
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plugin the values and see wat u get
nslesin
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\[A= 200 (1+ \frac{ 0.03 }{ 12 }) ^{(12\times ^{10)}}\]
ganeshie8
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yes ! give it to ur calculator
nslesin
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So I do \[(1+0.03\div12)\]first?
ganeshie8
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yes
nslesin
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\[A= 200 (1 + 0.0025) ^{12\times10}\]
ganeshie8
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yes
nslesin
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\[A= 200(1.0025)^{(120)}\] I am unsure which part to do first.
ganeshie8
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exponent first
ganeshie8
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\((1.0025)^{120}\)
nslesin
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269.87.. that seems like a small #
ganeshie8
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thats all you wud get at 3% interest rate for 10 years
this is not an annuity setup @phi
phi
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For Zach, the equation is
\[ FV= pymt \cdot \frac{ (1+i)^n  1}{i} \]
where n is 10 years, pymt is 2400 and i is 0.03
nslesin
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Yolanda 296.87?
phi
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no, Yolanda is depositing 200 per month, or 200*12= 2400 per year
for 10 years = 24,000
that is if there was no interest. But there is 3% interest, so it will be bigger than that
ganeshie8
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yes @phi thanks for catching that, weird 260 is small i dint even notice... i need to go run an errand, cya
nslesin
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@phi so what is the equation set up now im officially confused could u write it step by step for me?
phi
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I wrote out Zach's can you do that one first ?
nslesin
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I got 82,400
phi
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can you show your steps?
nslesin
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Fv= 2400 x (1+0.03)/0.03
phi
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that is not the formula. Look more carefully
nslesin
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fv=2400 x (1+0.03)^(10)1/0.03?
phi
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yes but use parens
fv=2400 x ( (1+0.03)^(10)1 ) /0.03?
nslesin
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27200?
phi
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ball park, but not exactly
what do you get for 1.03^10
?
phi
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then subtract 1
nslesin
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1.343916379
phi
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yes, now subtract 1 to get
.343916379
nslesin
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then 0.343916379
phi
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now divide by 0.03
nslesin
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27,513.31
phi
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yes, that looks good.
nslesin
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So thats Zachs. now i have to find balance in Yolanda savings plan after 10 years
phi
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For Yolanda you use the same formula (they don't say if she deposits the $200 at the end of each month.. but let's assume she does)
however, n is in months (so 10*12= 120) and the interest is per month so 0.03/12
nslesin
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Wait so n= number of years?
phi
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n is the number of payments
nslesin
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FV= pymt \[\times (1+i)^n1\]\[\div i\]
phi
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yes
nslesin
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it doesnt say the number of payments
phi
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it says every month for 10 years
how many months in a year ?
nslesin
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n=120
phi
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yes
nslesin
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how do i figure out pymt
is
i= 0.03?
phi
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you want i per month. they give you the i for the whole year
nslesin
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0.03/12?
phi
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yes
nslesin
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Argh i hate this 2.5 x 10 ^ 03 how do i do that?
phi
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you want (1+i)^120
where i= 0.03/12
so do it in steps: 0.03/12
add 1
raise to the 120 power
nslesin
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yeah im totally confused
phi
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you are doing
\[ FV= pymt \cdot \frac{ (1+i)^n  1}{i} \]
does your calculator have memory, so you can put 0.03/12 into memory ?
nslesin
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dont think so
phi
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type parens
(
then 1 + 0.03/12
then close
)
then
^
then 120
nslesin
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0.03 ÷ 12?
phi
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yes
nslesin
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2.5 x 10 ^ 03 how do i do that?
phi
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add 1
nslesin
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i= 5
phi
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just type into your calculator
0.03 ÷ 12 + 1
enter
phi
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you will get a number
now type
^
120
nslesin
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1.349353547
phi
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then type

1
(to subtract 1)
nslesin
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wait 1.0025+1= 2.0025
phi
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you are doing
1.0025^120  1
phi
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1.0025^120  1
you get
1.349353547 1
and
.349353547
now divide by (0.03/12) (or 0.0025)
nslesin
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but what about the 0.349353547+1?
phi
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you are doing
1.0025^120  1 which gives you 0.349353547
at this point, you do not add +1. the formula says divide by i
i is 0.0025 (the same as 0.03/12)
nslesin
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it just FV= pymt (1.0025)^120 1
phi
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you need parens and you need to divide by i
\[ FV= pymt \cdot \frac{ (1+i)^n  1}{i} \]
nslesin
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whats the pymt?
phi
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the payment is how much Yolanda is saving each month (how much she is paying into her bank account)
nslesin
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200
phi
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yes
nslesin
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268.87
nslesin
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that doesnt seem right
phi
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because it is not correct.
you must use the correct formula
nslesin
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The FV?
phi
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yes
\[ FV= pymt \cdot \frac{ (1+i)^n  1}{i}\]
nslesin
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200 (1+0.03/12)^1201
phi
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you forgot the divide by i
nslesin
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1+0.03/12?
phi
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I am saying that this is not correct
200 (1+0.03/12)^1201
the correct formula is
200 ( (1+0.03/12)^1201)/ (0.03/12)
nslesin
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oh i forgot to add divide by i
nslesin
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748.86
phi
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you are not doing the calculation correctly
type this into the google search window
200 * ( (1+0.03/12)^1201)/ (0.03/12)=
nslesin
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27948.28
phi
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yes
nslesin
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and zach was what we did before which was 27,513.31
nslesin
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