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March 8th, 2013, 08:55 AM   #1
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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
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March 8th, 2013, 12:24 PM   #2
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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...
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March 8th, 2013, 08:33 PM   #3
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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
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March 9th, 2013, 04:17 AM   #4
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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%
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March 9th, 2013, 06:14 AM   #5
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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
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March 9th, 2013, 10:43 AM   #6
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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
So, with your example:
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
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March 10th, 2013, 06:28 PM   #7
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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
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March 10th, 2013, 08:18 PM   #8
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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...
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