It's all about the interest...

E

elisemd

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Jan 3, 2006
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11

Alright, a lil help with this one...

Problem: Find present value of 54, 689.39 if the interest is 11.2% compounded monthly for 9 months.

I guess I just don't know how to set it up...can someone help me start it?

~Elise

 
Why are you using a continuous-compounding-interest formulation (using the number "e") when the exercise says that the interest is compounded monthly? Is there more to the exercise that wasn't included?

Thank you.

Eliz.
 
Wrong equation i guess

I guess that's where my problem was...I was using the wrong equation...can u please tell me which equation i should use??

~Elise
 
You should probably use the "present value" formula they gave you.

Eliz.
 
Not following

I'm seriously not following...am I blind? I used to be so good at these, but now, 2 years later, I have forgotten. It's probably the most frusterating thing.

~Elise
 
I don't know how your book is organized, but if it covers the topic of "present value", there should be a listing in the index in back, and the relevant section should contain the formula they want you to use. There appear to be different formulas:

. . . . .Finance Professor: Present Value

. . . . .Saint Joe.edu: Present Value

. . . . .Wikipedia: Present Value

. . . . .Duke University: WWWFinance (see section 0.5)

. . . . .The Concise Encylopedia of Economics: Interest

Which one does your book use?

Eliz.
 
Thank you!!!

I'm not using a book. I'm trying to do a pre-test. And trying to remember everything I was taught 2-3 years ago. It's quite sad how much I've forgotten.
 
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