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# Advanced Math/Solve for r in monthy compound interest formula

buba dumb dumb wrote at 2010-11-05 15:58:26
Haha, you did it wrong! you can't take both sides of the equation to the (1/60) until you move the 2000 to the other side. The power of 60 only affects whats inside the parenthesis.

BiocideJ wrote at 2010-11-05 18:51:32
I came across this answer because I too needed something similar, however, there is a slight problem with the previously posted answer.

The 2000 needs to be moved BEFORE the exponent so the corrected final formula would be:

r = 12*[{(3586.86/2000)^(1/60)}-1]

or in terms of the variables...

r = n * [{(A/p)^(1/nt)}-1]

Sarah wrote at 2012-02-08 05:30:33
You would actually want to divide by 2000 before you take both sides to the (1/60) So your steps would be as follows:

Original Problem

3586.58=2000 (1+r/12)^60

Step 1: Divide both sides by 2000 and get:

3586.58/2000=(1+r/12)^60

Step 2: take both sides to the ^(1/60) and get:

(3586.58/2000)^(1/60)= 1+r/12

Step 3: Subtract 1 from both sides and get:

((358.58/2000)^(1/60))-1=r/12

Step 4: Multiply both sides by 12 to get r alone:

(((358.58/2000)^(1/60))-1)12=r

It's a minor mistake that leads to a slightly different number if done the other way.

Wei Chen wrote at 2013-02-21 21:17:11
You can find r using this formula

r=n*(10^(logA-logP/nt)-1)

=12(10^(log3586.58-log2000/60)-1)

=11.7%

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