Focal Dates

[bitesnbites]

Sorta having trouble with current focal dates for some reason. I think i'm over looking a main step.

You are scheduled to repay a debt in two payments, $300 due 1 month ago, and $800 due in 4 months. Instead you negotiate to pay $600 today, and the remaining balance in 7 months. How much will the balance be if the focal point is today and the interest is 5% PA.

How do you calculate based on TODAYS focal date? I know if it were $800 due in 4 months with a focal point in 7 months it would be based on (3/12).

In this example using today as a focal date, what would 1 month ago be based on? (?/12 months) and $800 (?/12 months)

For some reason I am just not comprehending focal dates based on Today, and Past value payments.

Can someone assist with the above example i've provided so I can see the workings of where it is i'm misunderstanding


Thanks

 

[HallsofIvy]

Sorry, but I have no idea what you mean by "focal dates". "Focus" in what sense?

 

[bitesnbites]

MONTH  PAYMENT  INTEREST  BALANCE
-1                        1100.00 : a month ago
0      -600.00      4.58   504.58 : today
7      -519.48     14.90      .00 : 7 months later

Assumes interest compounds monthly.

If you don't follow that, don't apply for a job at your local Bank

Simple Interest actually.

 

[bitesnbites]

Sorry, but I have no idea what you mean by "focal dates". "Focus" in what sense?

Just going by the material I was given, it's stating to use "focal dates". Draw a timeline and enter the focal date as well as the amounts you are given, move all amounts to the focal dates using the correct formula. The focal date for this particular question is 7 months.

I guess what i'm asking is, what is the correct formula for the question.

 

[bitesnbites]

MONTH  PAYMENT  INTEREST  BALANCE
-1                        1100.00 : a month ago
0      -600.00      4.58   504.58 : today
7      -519.30     14.72      .00 : 7 months later

Ok then: 18 cents lesser!

Interest for 1 month = amount owing * .05/12
504.58 * .05/12 * 7 = 14.72

the answer key is providing me with $502.38

 

[JeffM]

Try looking at http://www.youtube.com/watch?v=LX2uvAyS95U

 

[Ishuda]

MAY I KNOW why my post (yesterday) to this thread was deleted?

NO?

 

[stapel]

Why is this two-year-old thread being resurrected? :???:

 

[Ishuda]

...
May I suggest that you at least advise the "culprit" when deleting
a post/thread: if not, we wonder if our memory is going kaput

I don't wonder at all. All I know is that memory is the second thing to go and I've forgotten the first. Something to do with spaceships I believe.

 

[DexterOnline]

the answer key is providing me with $502.38

300 * (1+0.05/12) + 800 / (1+0.05/12*4) = 600 + p  / (1+0.05/12*7)
301.25 + 786.8852459016393 - 600 = p  / 1.029166666666667
488.1352459016393 = p  / 1.029166666666667
488.1352459016393 * 1.029166666666667 = p 
502.3725239071039 = p 
[B]$502.37 = p[/B]

Off by a cent

 

[jonah2.0]

DISCLAIMER: Beer soaked rambling/opinion/observation ahead. Read at your own risk. Not to be taken seriously. In no event shall the wandering math knight-errant Sir jonah in his inebriated state be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the use of his beer (and tequila) powered views.

300 * (1+0.05/12) + 800 / (1+0.05/12*4) = 600 + p  / (1+0.05/12*7)
301.25 + 786.8852459016393 - 600 = p  / 1.029166666666667
488.1352459016393 = p  / 1.029166666666667
488.1352459016393 * 1.029166666666667 = p 
502.3725239071039 = p 
[B]$502.37 = p[/B]

Off by a cent

Indeed.
As shown by Sir Denis before his correcting update post was unceremoniously murdered,
with intermediate rounding to the nearest cent on the left side side,
p = $502.38

Glad to see you're still in the game Sir Dexter.

 

[Deleted member 4993]

300 * (1+0.05/12) + 800 / (1+0.05/12*4) = 600 + p  / (1+0.05/12*7)
301.25 + 786.8852459016393 - 600 = p  / 1.029166666666667
488.1352459016393 = p  / 1.029166666666667
488.1352459016393 * 1.029166666666667 = p 
502.3725239071039 = p 
[B]$502.37 = p[/B]

Off by a cent

You have to remember - Denis deals with "looney" money...

 

[jonah2.0]

DISCLAIMER: Beer soaked rambling/opinion/observation/reckoning ahead. Read at your own risk. Not to be taken seriously. In no event shall the wandering math knight-errant Sir jonah in his inebriated state be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the use of his beer (and tequila) powered views.

DISCLAIMER: COFFEE soaked rambling/opinion/observation ahead. Read at your own risk. Not to be taken seriously. In no event shall the wandering math knight-errant Sir Denis in his sobered state be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the use of his coffee (and double cream) powered views.

What the **** man?
Pure genius. You just made my day. Can't stop laughing for about 5 minutes.
That's copyright infringement. I should sue you.
Expect a similar disclaimer from Sir Dexter sometime soon involving his favorite cola drink.