quick maths question.... (1 Viewer)

[wallid]

i got no ideaaa how to do this, someone please help


at 6% the present value of a series of payments is $1810. At 6.5% the present value the same series of payments is $1763. Use linear interpolation to estimate the rate of interest for which these payments have a present value of $1776???


much appreciated...

 

[kunny funt]

let required rate be i, then:

(i - 6)/(6.5 - 6) = (1776 - 1810)/(1763 - 1810)
i - 6 = 0.5*(-34/-47)
i = 6+0.36
= 6.36

so i is 6.36%

 

[wallid]

lol, al seems so easy now..


thanks agaain!!!!!!!!!!!!!!

 

[Sweet_Lemon]

omg...forgot the formula already...=.=

 

[redruM]

i - low/ [ high - low ] = P(i) - P(low)/ [ P(high) - P(low) ]

draw it out, it will become easy to remember.

oh and you should have a table (in your head or otherwise)

interest rate              price
low                       P(low)
i                         P(i)
high                      P(high)

thats it. just practice a question or two to make sure you are getting the right low/high interest rate, not low/high price.

i got a test on this stuff tmw. good check for myself

 

[Sweet_Lemon]

oh...i heard my friend say there's acst 101 class test 2moro...good luck all

 

[redruM]

except mine is at 8am (!!!!! wtf!) and harder, BUT no elements