My Math Forum Value of an annuity in any given month

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September 10th, 2011, 09:07 PM   #11
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Re: Value of an annuity in any given month

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 Originally Posted by Erimess I still don't get the k - 1 thing. k in finance stands for interest rate, so that's like saying 9% - 1, or 9.38% - 1. Don't know where that fits in.
1, not 1%. If the interest rate was 9% the method I gave would yield 1.09 which should have 1 subtracted to give 0.09. I just didn't want you to confuse this with 1.09% which it isn't.

Of course the Excel way is easy too.

September 10th, 2011, 11:44 PM   #12
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Re: Value of an annuity in any given month

Quote:
 Originally Posted by CRGreathouse 1, not 1%. If the interest rate was 9% the method I gave would yield 1.09 which should have 1 subtracted to give 0.09. I just didn't want you to confuse this with 1.09% which it isn't.
I wouldn't have cause k = interest, not interest + 1. :P (Of course, I don't about OP.)

 September 11th, 2011, 12:03 AM #13 Senior Member   Joined: Apr 2011 From: USA Posts: 782 Thanks: 1 Re: Value of an annuity in any given month Well, personally, when I was speaking doing it in Excel, I wasn't talking about using functions anyway. I never did much like the TVM functions in there. I really had no clue how I would have done this, but I would have tried. I think your knowledge of Excel exceeds mine (or at least is different than mine) - I've never heard of a floor formula and not quite following what you're doing. But I suspect putting together what we've discussed with equations combined with your Excel knowledge, you'll be fine. I'm sure my way would have been much more complicated. Sometime I'll have to take a look at what you're doing there and look up all that then, else stuff. Sounds like a "nested if". There's probably been plenty of things I could have been utilizing that for. When I took the accounting-applied spreadsheet class, it was Lotus 123, the very first Windows version of it. In fact, we spent 3 weeks on the DOS version. (Which I still have... somewhere.) Things have changed.
September 11th, 2011, 09:45 AM   #14
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Re: Value of an annuity in any given month

Quote:
Originally Posted by Erimess
Quote:
 Originally Posted by CRGreathouse 1, not 1%. If the interest rate was 9% the method I gave would yield 1.09 which should have 1 subtracted to give 0.09. I just didn't want you to confuse this with 1.09% which it isn't.
I wouldn't have cause k = interest, not interest + 1. :P (Of course, I don't about OP.)
The context for subtracting 1 was:
"If over 10 years you go from $P to$P * k, then the interest rate per ten-year period is k-1."

So if over ten years you went from $1000 to$2000 the interest rate over the ten-year period is not 2000/1000 = 2 but 2000/1000 - 1 = 2 - 1 = 100%.

September 11th, 2011, 09:48 AM   #15
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Re: Value of an annuity in any given month

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 Originally Posted by Erimess Well, personally, when I was speaking doing it in Excel, I wasn't talking about using functions anyway. I never did much like the TVM functions in there.
As a non-accountant, the built-in finance functions scare the daylights out of me.

September 13th, 2011, 08:42 PM   #16
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Re: Value of an annuity in any given month

Quote:
Originally Posted by CRGreathouse
Quote:
 Originally Posted by Erimess Well, personally, when I was speaking doing it in Excel, I wasn't talking about using functions anyway. I never did much like the TVM functions in there.
As a non-accountant, the built-in finance functions scare the daylights out of me.
I am an accountant and I still don't like them - I never really quite know what they're up to. When I have a student who is required to use them, I do it first and then check it against my work.

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