My Math Forum simple and compund interest help

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 October 9th, 2008, 11:12 PM #1 Newbie   Joined: Oct 2008 Posts: 1 Thanks: 0 simple and compund interest help An investor purchased a $500000, 180 T-bill, 150 before maturity to yield 2.86%. he then sold the T-Bill 80 days later to yield 2.45%. How much profit did he make for the lenght of time he help the T-Bill and what was his actual rate of return? ------------------------------------ my work so far: s= 500000 (1+0.011753424) 500000(1.011753425) =505876.71 p=505876.71 (1+0.00469 =508.25 **AND** I need help: You owe two payments$6000 one due in 6 months and the other due in 15 months. If you make a payment of $6000 today, when must you make the second payment of$6000 if money is worth 8% compounded semi annually? ------------------------------------------------------------------------ This is my work so far: Fv=6000 (1+0.00667)^-15 =6000(0.9051237746) =5430.8 n= 12x15/12 n=15 Edit/Delete Message
October 10th, 2008, 02:25 PM   #2
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Joined: May 2008

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Re: simple and compund interest help

Quote:
 Originally Posted by sharani **AND** I need help: You owe two payments $6000 one due in 6 months and the other due in 15 months. If you make a payment of$6000 today, when must you make the second payment of \$6000 if money is worth 8% compounded semi annually? ------------------------------------------------------------------------ This is my work so far: Fv=6000 (1+0.00667)^-15 =6000(0.9051237746) =5430.8 n= 12x15/12 n=15 Edit/Delete Message
You have to familiarize yourself with exercises/problems in equations of value.
Using today as the comparison date, we have
$6,000\left( {1 + \frac{{.08}}
{2}} \right)^{ - \left( {\frac{6}
{{12}} \times 2} \right)} + 6,000\left( {1 + \frac{{.08}}
{2}} \right)^{ - \left( {\frac{{15}}
{{12}} \times 2} \right)} = 6,000 + 6,000\left( {1 + \frac{{.08}}
{2}} \right)^{ - \left( {t \times 2} \right)} \Leftrightarrow t = ?$

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