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Re: on a compound interest problem

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On 3/20/17 02:15, Daniel Bastos wrote:
> Barry Schwarz <schwarzb@dqel.com> writes:
> 
>> On Sun, 19 Mar 2017 10:30:12 -0300, Daniel Bastos <dbastos@toledo.com>
>> wrote:
>>
>>> I say this problem's formula is incorrect, but I'd appreciate an expert
>>> confirmation.
>>>
>>> Problem.  Consider an amount q invested for n years at an interest rate j.
>>> The total amount after n years is given by the formula
>>>
>>>   gf = q * ((1 + j/100) + (1 + j/100)^2 + ... + (1 + j/100)^n).
>>
>> This is the formula for q invested **each year** over a length of n
>> years.
> 
> That's probably what the problem meant.  

You can see that by opening the brackets.
Using a simple example, where q = 100, n = 3, and rate 0.05

# invest 100 in the first year, and get the first year's future value of
   FV = 100 * 1.05 = 105

# at the end of the first year you add again 100 to those 105, and get 
at the end of the second year:
   (100 + 105) * 1.05 = 215.25

# at the end of the second year you add again 100 to 215.25, and get at 
the end of the third year:
   (100 + 215.25) * 1.05 = 331.01



-- 
Respectfully,
Alla

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on a compound interest problem Daniel Bastos <dbastos@toledo.com> - 2017-03-19 10:30 -0300
  Re: on a compound interest problem Barry Schwarz <schwarzb@dqel.com> - 2017-03-19 13:11 -0700
    Re: on a compound interest problem Daniel Bastos <dbastos@toledo.com> - 2017-03-19 20:15 -0300
      Re: on a compound interest problem Alla <vitale.alla@gmail.com> - 2017-06-06 10:30 +0300
        Re: on a compound interest problem Alla <vitale.alla@gmail.com> - 2017-06-06 10:34 +0300
          Re: on a compound interest problem Daniel Bastos <dbastos@toledo.com> - 2017-08-10 13:03 -0300

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