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October 14th, 2012, 04:23 PM   #1
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financial mathematical (foundation level)

Determine how long RM5000 must be left to accumulate at 15% p.a. compounded monthly for it to amount to twice the accumulated value of another RM5000 deposited at the same time at 9% p.a. compounded quarterly.
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October 14th, 2012, 06:52 PM   #2
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Re: financial mathematical (foundation level)

73 months
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October 14th, 2012, 07:35 PM   #3
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Re: financial mathematical (foundation level)

Quote:
Originally Posted by The Chaz
73 months
Betya a Canadian Loonie ($1.0176 USA!) it's in between 138 and 139 months: you on, Chaz?
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October 14th, 2012, 08:40 PM   #4
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Re: financial mathematical (foundation level)

You want to solve:



for t, in years. Do you see why?

I got:

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October 15th, 2012, 01:36 AM   #5
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Re: financial mathematical (foundation level)

Agree. Another way is convert the quarterly rate to its equivalent monthly rate:
r = (1 + .09/4)^(1/3) - 1 = .0074444427....

(1 + .15/12)^n = 2(1 + r)^n

n = LOG(2) / LOG[(1 + .15/12) / (1 + r)] = 138.472951883... months
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October 15th, 2012, 01:59 AM   #6
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Re: financial mathematical (foundation level)

Quote:
Originally Posted by Denis
Quote:
Originally Posted by The Chaz
73 months
Betya a Canadian Loonie ($1.0176 USA!) it's in between 138 and 139 months: you on, Chaz?
I should have made the amount more obviously absurd. I lose no sleep from spoon feeding wrong answers to people who can't be bothered to show work
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October 15th, 2012, 06:02 AM   #7
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Re: financial mathematical (foundation level)

Good point!
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