Help Separating a Variable

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rscot328

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Joined
Mar 25, 2021
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Hi, I'm trying to solve for i

i = interest rate
P=payment
A- amount financed
n = number of payments

This is as far as I can get, and I need to get:

P - (i x A) = P x (1+i)^-n

I need i to be alone on one side of the equation. Can anybody help?
 
rscot328 said:
Hi, I'm trying to solve for i

i = interest rate
P=payment
A- amount financed
n = number of payments

This is as far as I can get, and I need to get:

P - (i x A) = P x (1+i)^-n

I need i to be alone on one side of the equation. Can anybody help?
Click to expand...
This is an equation for compound interest. Using simple interest:

Can you develop an equation for amount due after "n" years?​

Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:


Please share your work/thoughts about this problem.
 
Yes, that is a compound interest formula that solves for monthly payment. All I'm trying to do is separate the variable to where i is alone on one side of the equation. The original formula solves for Payment (P)

There is also:
n = number of months
A = amount financed
i = monthly interest (APR/12)

The original formula that solves for payment is:

P = A x i
-------
1 - (1 + i) ^ -n

I haven't taken algebra since high school 20 years ago, so I am very rusty. Due to the exponent with n, I cannot reorganize the formula to where it solves for i (monthly interest)
 
The furthest I can get is:

P - ( i x A) = P (1+i)^-n

I still have i on both sides of the equation
 
rscot328 said:
The furthest I can get is:

P - ( i x A) = P (1+i)^-n

I still have i on both sides of the equation
Click to expand...
Are you trying to solve for i using algebraic methods/equation?

If that is what you want, then the short answer is:

it cannot be done".​

The value of i can be approximated using numerical methods.
 
If you need to compute an approximate value, there is a formula in excel that will give a good approximation.

There is no closed form formula.

What are you trying to do?
 
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