My Math Forum Another Question about Compound Interest

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

 August 9th, 2014, 06:00 AM #1 Senior Member     Joined: Nov 2010 From: Indonesia Posts: 1,961 Thanks: 132 Math Focus: Trigonometry Another Question about Compound Interest Starting from May, $\displaystyle 1^{st}$ 2012 and so on in the early days of the month, Jaya Abadi company will give donation to an orphanage as much as 3,600,000.00 IDR. The orphanage wants the donation to be received at once in May, $\displaystyle 1^{st}$ 2012, and the bank agrees and gives 6% of compound interest per year. The amount of money received is: A. 56,400,000.00 IDR B. 59,784,000.00 IDR C. 60,000,000.00 IDR D. 60,216,000.00 IDR E. 63,600,000.00 IDR Is it possible to get that much in one day (notice there's no change of date)? Or did they just make a typo?
 August 9th, 2014, 03:09 PM #2 Senior Member   Joined: May 2008 Posts: 281 Thanks: 66 Perpetuity problem. Answer is C. 3,600,000/.06 Google it up. Wiki it up.
 August 9th, 2014, 08:06 PM #3 Senior Member     Joined: Nov 2010 From: Indonesia Posts: 1,961 Thanks: 132 Math Focus: Trigonometry OK, thanks for your help.
 August 9th, 2014, 08:31 PM #4 Senior Member     Joined: Nov 2010 From: Indonesia Posts: 1,961 Thanks: 132 Math Focus: Trigonometry Wait, I Googled it up and encountered this page: https://www0.gsb.columbia.edu/premba...ce/s5/s5_4.cfm Then I got confused. Is the one applied here the Present Value of No-Growth Perpetuities or Present Value of a Perpetuity Due. I couldn't digest which one fit more to the question, not to mention that someone else I asked answered E instead, which means that he assumed that it is Present Value of a Perpetuity Due. Your answer means that you assumed it is Present Value of No-Growth Perpetuities. Which one is correct?
August 10th, 2014, 04:27 AM   #5
Senior Member

Joined: May 2008

Posts: 281
Thanks: 66

Quote:
 Originally Posted by Monox D. I-Fly Wait, I Googled it up and encountered this page: https://www0.gsb.columbia.edu/premba...ce/s5/s5_4.cfm Then I got confused. Is the one applied here the Present Value of No-Growth Perpetuities or Present Value of a Perpetuity Due. I couldn't digest which one fit more to the question, not to mention that someone else I asked answered E instead, which means that he assumed that it is Present Value of a Perpetuity Due. Your answer means that you assumed it is Present Value of No-Growth Perpetuities. Which one is correct?
Good call. My bad. I guess I wasn't drunk enough.
Your friend is right. It is inded a case of the "Present Value of a Perpetuity Due".
Accordingly, we'd have 3600000+3600000/.06

 August 10th, 2014, 06:41 AM #6 Senior Member     Joined: Nov 2010 From: Indonesia Posts: 1,961 Thanks: 132 Math Focus: Trigonometry That's good. Glad finally I can confirm it before I go to the office again. Thanks for the confirmation.
 August 10th, 2014, 06:52 AM #7 Senior Member   Joined: May 2008 Posts: 281 Thanks: 66 By the way, what currency is IDR?
 August 10th, 2014, 02:28 PM #8 Senior Member     Joined: Nov 2010 From: Indonesia Posts: 1,961 Thanks: 132 Math Focus: Trigonometry IDR is short for "Indonesian Rupiah". Rupiah is the currency used in Indonesia, my country. Though I wrote 63,600,000.00 IDR, for example, our country's writing format is Rp 63.600.000,00 instead.

 Tags compound, interest, question

 Thread Tools Display Modes Linear Mode

 Similar Threads Thread Thread Starter Forum Replies Last Post Monox D. I-Fly Economics 2 August 9th, 2014 08:08 PM Qwertyqwerty Elementary Math 2 September 20th, 2011 10:41 PM ProJO Algebra 3 April 3rd, 2011 09:09 PM grainne Elementary Math 4 January 5th, 2010 01:16 PM ProJO Calculus 1 December 31st, 1969 04:00 PM

 Contact - Home - Forums - Cryptocurrency Forum - Top