My Math Forum How it solve Interest on financing?

 Economics Economics Forum - Financial Mathematics, Econometrics, Operations Research, Mathematical Finance, Computational Finance

 March 8th, 2013, 08:55 AM #1 Newbie   Joined: Mar 2013 Posts: 4 Thanks: 0 How it solve Interest on financing? hello, Sorry for my english, I'm from Brazil I have a simple question ... I would like to solve using formulas on paper because the result I found using the hp 12c. data Funding Amount - $15,000.00 Value of shares - R$ 1.400,00 Number of months - 12 months The interest will be? Answer: 1.7881% I was using this formula: PV= (1 - (1+i)^n / i) . p available on this link https://www3.bcb.gov.br/CALCIDADAO/publ ... acoesFixas Thanks
March 8th, 2013, 12:24 PM   #2
Math Team

Joined: Oct 2011

Posts: 14,597
Thanks: 1038

Re: How it solve Interest on financing?

Quote:
 Originally Posted by alexapaula Funding Amount - $15,000.00 Value of shares - R$ 1.400,00
Is funding amount 15 thousand dollars? Is share one dollar and forty cents? What does ",00" mean?

Anyway, the formula you are using is the Present Value of an annuity.
As example, $100 per month for 12 months at 6% annual compounded monthly: Present Value = [100 * (1 - (1 + .06/12)^(-12))] / (.06/12) = 1161.89 Please clarify your problem...  March 8th, 2013, 08:33 PM #3 Newbie Joined: Mar 2013 Posts: 4 Thanks: 0 Re: How it solve Interest on financing? I wrote wrong the correct is$ 15.000 Value of shares - $1.400 Number of months - 12 months The question is a financing of$ 15,000 that is paid 12 times $1,400, what is the interest rate? I would like to find the response of interest rate but using the formula, I don't know what is the correct formula. using the calculator on this site https://www3.bcb.gov.br/CALCIDADAO/publ ... acoesFixas I find the interest rate the Answer: 1.7881% -- using calculator financeria How do I get this same result using the traditional method, with formula, pencils and paper? Thanks  March 9th, 2013, 04:17 AM #4 Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,597 Thanks: 1038 Re: How it solve Interest on financing? Sorry, but me no understando... An example (may help you): a stock had a dividend of$1.50, a price per share of $60.00, and an expected growth rate of 10%: rate of return = [(1.50(1 + .10)) ÷ 60] + .10 = .1275, or 12.75%  March 9th, 2013, 06:14 AM #5 Newbie Joined: Mar 2013 Posts: 4 Thanks: 0 Re: How it solve Interest on financing? Denis, The question : A funding of$ 15.000 is paid in 12 installments of $1.400 which is the interest rate? I know this interest rate is 1.7881% but how can I arrive this result? without using financial calculator March 9th, 2013, 10:43 AM #6 Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,597 Thanks: 1038 Re: How it solve Interest on financing? Quote:  Originally Posted by alexapaula A funding of$ 15.000 is paid in 12 installments of $1.400 which is the interest rate? I know this interest rate is 1.7881% but how can I arrive this result? without using financial calculator Ahhhhhhhhhh....I see..... This is simply a loan of$15 repaid over 12 months, monthly payment being \$1.40: what is interest rate?

Formula for loan payment:
P = A*i / [1 - (1 + i)^(-n)]
P = Payment
A = Amount of loan
i = interest rate
n = number of payments
1.4 = 15*i / [1 - (1 + i)^(-12)]

That style of equation CANNOT be solved directly; numeric methods are required (like guess and check).
Have a look here:
http://www2.math.umd.edu/~immortal/206/ ... ally.shtml

If you want to see more sites, google "solving numerically".

The rate of 1.7881 you quoted is correct; that' s .017881 compounded monthly.

Did I impress you enough for you to come up to Canada and marry me? :P

 March 10th, 2013, 06:28 PM #7 Newbie   Joined: Mar 2013 Posts: 4 Thanks: 0 Re: How it solve Interest on financing? Thanks you, helped me a lot, but I can not marry you because I am man ... kkkkk I'll research about it on google .. see you later
March 10th, 2013, 08:18 PM   #8
Math Team

Joined: Oct 2011

Posts: 14,597
Thanks: 1038

Re: How it solve Interest on financing?

Quote:
 Originally Posted by alexapaula Thanks you, helped me a lot, but I can not marry you because I am man ... kkkkk
I'm commiting suicide...

 Tags financing, interest, solve

### solve for payment using financing calculator

Click on a term to search for related topics.
 Thread Tools Display Modes Linear Mode

 Similar Threads Thread Thread Starter Forum Replies Last Post grace25 Elementary Math 12 January 24th, 2013 08:46 PM jeanjake Algebra 2 October 3rd, 2012 04:42 AM Qwertyqwerty Elementary Math 2 September 20th, 2011 10:41 PM douglasrac Economics 0 February 17th, 2011 09:14 AM kfarnan Algebra 3 February 13th, 2011 03:30 PM

 Contact - Home - Forums - Cryptocurrency Forum - Top