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November 9th, 2015, 11:29 AM   #11
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I stick to my water pistols!

Over the 2 years, a savings account at those 2 rates
accumulates to 3000(1.0075)^12(1.01)^12

The required monthly annuity to equal the above
is 138.0914495336702774404...

This is sticking to the normal financial formulas,
not inventing anything exotic.

I ain't listening to anyone who tells me otherwise,
even if they're correct!
Thanks from AbrahamA
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November 9th, 2015, 05:29 PM   #12
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Quote:
Originally Posted by jonah View Post
For a monthly payment of 138.10, I get a final payment of 137.88

What say you Sir D? Sir Dexter?
It seems you read a textbook you referred me to in the year 2008/09 can't recall which when as a finance math novice I came to Math Help Forum looking for formula to calculate ending value of a savings account with continuous compounding.

You, Sir Jonah, were much sober at that time and indeed were the first one and the only one to reply to my thread where you posted links to two textbooks on finance on Oogle Cooks the Books. I still recall one of these books was published by Glen McGraw Hill (Glen was an Aussie fast bowler at that time). My memory does not serve me remember the source of the other text as these are my golden years in retardment living off borrowed money as I held no job when I was young therefore the savings nest is empty.

Yes in one of those texts, the author referred to sinking funds and the odd paradox that the terminal payment is usually different from periodic payment.

Now I had angered the Cool Canadian Capitalist our beloved Sir Denis who is sticking to his water guns.
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November 9th, 2015, 07:55 PM   #13
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Quote:
Originally Posted by AbrahamA View Post
Now I had angered the Cool Canadian Capitalist our beloved Sir Denis who is sticking to his water guns.
YES you have: I'm so angry that I got the hiccups

Seriously, a final payment being slightly different has nothing to do
with mathematics; it's just the nature of Da Beast; a bit like
eating exactly 1/3 of an apple; you'll leave or you'll overeat
some ..............3333 of the uncooperating fruit from Eden...
(if there's no worm(s) inside, of course).

Now let me go back to my prie-dieu and finish off the
Hoooooooly Rosary I was sweatingly reciting bead by bead...
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November 9th, 2015, 08:08 PM   #14
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Quote:
Originally Posted by Denis View Post
You a cricket player?
If you bowl a cricket ball and hit the wicket, you WICKED it
Most boring game on the planet...
The last exploration into the oceans of finance was made possible through divine light of Odd whereas the counterparty Atan looming in darkness of abyss has His own version of financial mathematics.

Now yours truly, Abraham A, works under the supervision of his new boss Atan whose wickedness is a clear and present danger to those who have been lending to US under stringent terms and conditions.

At this juncture in time, US stand at crossroads of financial battleground and the winner will once again regain the financial and economic position that it was pin-striped suited for.

Fiction and myth aside, the final battle of Armageddon is about to unfold in the World financial markets where almighty US dollar sign of times will reign supreme and all other money denominations will bow down to the Great Atan, the Lord of darkness, wickedness and civil disobedience movement of early 21st century Fox movie studios whose control will be taken back from the current owner from Down Under the influence of crack cocaine.

Here are the excerpts of the monthly payments scheme shown throw the rear view mirror of Atan's Lincoln Township Car.

Same loan of \$3,000 for 24 months at rates close to 12%, the results shown previously had payments lower than the actual payments, thanks Odd for that!

This time the results for monthly payments are all above the actual payment, thank Atan for this

i(1-12) = 11.9999999%
i(13-24) = 12.0000001%

Market price of the monthly payment

Payment = ($141.22)
Total Interest Paid = $389.29
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)


Arbitrage driven prices of monthly payment

Payment = ($141.23)
Total Interest Paid = $389.54
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

Payment = ($141.32)
Total Interest Paid = $391.64
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

Payment = ($141.35)
Total Interest Paid = $392.45
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

Payment = ($141.39)
Total Interest Paid = $393.38
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

i(1-12) = 12%
i(13-24) = 12%

Market price of the monthly payment

Payment = ($141.22)
Total Interest Paid = $389.29
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)


Arbitrage driven prices of monthly payment

Payment = ($141.23)
Total Interest Paid = $389.54
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

Payment = ($141.32)
Total Interest Paid = $391.64
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

Payment = ($141.35)
Total Interest Paid = $392.45
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)

Payment = ($141.39)
Total Interest Paid = $393.38
Total Principal Paid = $(3,000.00)
Balance at end of 24th month = $(0.00)
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November 9th, 2015, 08:41 PM   #15
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Arbitrage = Arab tiger (anagram)
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November 10th, 2015, 09:39 AM   #16
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Beer soaked ramblings follow.
Quote:
Originally Posted by AbrahamA View Post
You, Sir Jonah, were much sober at that time . . .
Nay Sir Dexteronlline/Dexteronlline2/AbrahamA/Ghostaccount (or whatever future username you'd care to come up with), I say nay.
I say I never was sober at those times you mentioned. If I was, I say wouldn't have posted anything at all.
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November 10th, 2015, 10:37 AM   #17
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Beer soaked ramblings follow.
Quote:
Originally Posted by Denis View Post
Seriously, a final payment being slightly different has nothing to do
with mathematics; it's just the nature of Da Beast; a bit like
eating exactly 1/3 of an apple; you'll leave or you'll overeat
some ..............3333 of the uncooperating fruit from Eden...
(if there's no worm(s) inside, of course).
Yes, yes coffedrinker; you are of course entitled to your own coffee soaked opinions.
'Tis of course mathematics nonetheless, your objections notwithstanding.
Quote:
Originally Posted by Denis View Post
Hoping to "liven up" this section
Considering that you managed to draw our retired serial coke drinker friend from his endless self declarations of retirement/withdrawal (he even asked the mods to delete him), I'd say you sure did manage to "liven up" this economics section with his highly creatve book of whatever references. Ah yes, economics, I remember it well. The 3 basic luxuries: food , shelter and clothing (I'm sure Sir Dan is familiar with this joke what with him being a fan of one of the stars of the show from which this line was taken).

Btw, your hope to "liven up" this section made me remember this:
A loan at an annual effective rate of 9% or 9% compounded annually or $\displaystyle {j_1} = 9\%$ is being repaid by monthly payments of \$750 each. The total principal repaid in the 12 monthly installments of the 8th year is \$400. What is the total interest paid in the 12 installments of the 10th year?

An interesting additional question of course is whether it's possible to solve for the amount of the loan and loan term from the given information.
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November 10th, 2015, 11:34 AM   #18
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Quote:
Originally Posted by jonah View Post
The total principal repaid in the 12 monthly installments of the 8th year is \$400.
Soooooo....750 * 12 - 400 = 8600 = interest during 8th year.

Looks like fun...will give it a shot after my 7th coffee...
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November 10th, 2015, 04:19 PM   #19
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Code:
MONTH  PAYMENT      BALANCE
   84        750.00         B
.....
   96        750.00         B - 400 (400 net to principal)
B = balance owing after 84th payment (end 7th year).
p = payment = 750.00
i = 1.09^(1/12) - 1 : u (1 + i)^12

Bu - p(u - 1)/i = B - 400
B = 99,616.379123.....?
B - 400 = 99,216.379123...

You can do this portion yourself:
Calculate n associated with B - 400 : n = 428 (rounded)

Total months = 428 + 96 = 524

Calculate PV of 524 payments: 101,645.380261.....

SO: the loan is for 101,645, over 524 months (43 years 8 months).

Works out fine: checked it...
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November 10th, 2015, 04:20 PM   #20
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Quote:
Originally Posted by jonah View Post
Beer soaked ramblings follow.
Considering that you managed to draw our retired serial coke drinker friend from his endless self declarations of retirement/withdrawal (he even asked the mods to delete him), I'd say you sure did manage to "liven up" this economics section with his highly creatve book of whatever references. Ah yes, economics, I remember it well. The 3 basic luxuries: food , shelter and clothing (I'm sure Sir Dan is familiar with this joke what with him being a fan of one of the stars of the show from which this line was taken).
Listen you all, none of you get it. You keep on going with your controlled experiments which you think are of high stakes yet you know beans if you ask me.

As I said to Denis the mentor before deciding to spend three days and equivalent of \$4 out of my pocket to prepare and post my replies to this thread and that on borrowed funds which wont be repaid as the income of \$3,000 I was once making from selling my Excel add-on was siphoned off me by someone(s) who like to play Odd yet they know they are only Ogg.

You see your argument about basic luxuries or in most peoples cases basic needs is of little value.

Our job, which was referenced in one of our posts, as ordained by Odd is of utter importance. We were selected to free US from financial and economic bondage that was imposed on US by foreign lenders with help from those who govern US.

For example, on Friday Nov 6th, 2015 the New York Times newspaper reported unexpected strong US employment and Earnings growth data may lead the Feds to increase interest rates on Short Term borrowing in their December meeting.

http://www.nytimes.com/2015/11/07/bu...t-october.html

You see this is a classic example of rigging the rate that leads to a rigged market. Nothing you read in newspapers, nothing you see on TV news may be taken as truth written in black and white. There are 50 shades of gray from which to extract the truth.

But then tis is the 21st century and those who deem that founding fathers done wrong to their fathers are now reversing the tapes to do wrongs to others fathers. Thus the cycle of doing wrongs to fix wrongs done in past, present and future.

As stated clearly, our task is to FREE US from economic and financial bondage. And the day is nigh when the SOB wont rise on Earth for a period of 24 hours as Angel Investor Arch Gabriel would cover the planet mother Earth with his wings as a SIGN of what will unveil in the 24 hours time period. From the time planet of the Apes awake in Tokyo to the time Hawaiians watch the NBC nightly news with Ms Mary Alice Williams, the whole stock indices around the globe will be wiped out. The cash flows from fixed income securities issued by US will have their signs reversed as if the creditors will turn into perpetual debtors as if US owed them Nothing and the Rest of the World will Owe us for Eternity.

That will the final episode of play written, directed and produced by AbrahamA, the self-taught and self-proclaimed Financial Engineer chosen by Odd.

Amen

And yes I only had one can of Coke this morning as its 6:20AM here in Punjab
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