Solving for Interest rate (r) where Principa (P) and Monthly Payment (m) are known

[danbosvac]

I'm trying to solve for r, in the following formula where m = 214.3 and P = 20000:

m = Pr(1+r)^104/((1+r)^104)-1)

I'm trying to use logs to solve the equation and get down to this point where I'm stuck:

logP + logr + 104log(1+r) = logm + log((1+r)^104)-1) - this underlined portion is where I'm stuck

Any help would be appreciated. Thanks

 

[tkhunny]

You could notice that (1+t)^104 / (1+t)^104 = 1.

 

[tkhunny]

In general, there is no DIRECT solution for the interest rate, given all the other pieces. Iterative, numerical methods are the way to go.

 

[JayJay]

I'm trying to solve for r, in the following formula where m = 214.3 and P = 20000:

m = Pr(1+r)^104/((1+r)^104)-1)

I'm trying to use logs to solve the equation and get down to this point where I'm stuck:

logP + logr + 104log(1+r) = logm + log((1+r)^104)-1) - this underlined portion is where I'm stuck

Any help would be appreciated. Thanks

Please check the formula m = Pr(1+r)^104/((1+r)^104)-1). I do not think it is correct.