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November, 2024

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Math problem help (actuarial/business/financial)

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tallteesteeze
Posts: 158 - Karma: 55
Ok im really stuck on this problem and am looking for help +k will most definitely be given. Here is the word problem.

A loan is made at a simple interest rate of 5%
a)in which period is this equivalent to an effective rate of 1/23 (compound interest, im assuming)
b)what is the effective interest rate for the period [4,6]

Part A I have the problem simplified (I think) and I may just be stuck with the algebra, however im not 100% sure im correct. Right now I'm at (1+.05t)=(1+1/23)^t and solving for T should most likely give me the answer.

Part B I believe I just take the total simple interest at t=6 which is 1.3 and subtract total simple interest from time 4 which is 1.2 and divide by 1.2 (1.3-1.2)/1.2 to give the effective interest rate for the period (.0833333)

Any help would be greatly appreciated
Aug 30 2013 2:26PM
20 1
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tallteesteeze
Posts: 158 - Karma: 55
bump in desperate need of help
Aug 31 2013 9:14PM
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cool_name
Posts: 4295 - Karma: 3,131
pretty sure its b
Sep 1 2013 4:56AM
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louie.mirags
Posts: 6015 - Karma: 5,027
Early on in semester.. good luck on the home stretch brah
Sep 1 2013 5:33AM
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feihlination
Posts: 8356 - Karma: 1,084
pretty horseshit tasks, but whatever.

i think the first one is correctly set up, if you want to solve it, you need the log

log(u^v)=v*log(u)

this should make it easy.

second one seems correct. but idk if they again want the compound tax rate between t4 and t6 or whatever.
Sep 1 2013 5:35AM
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tallteesteeze
Posts: 158 - Karma: 55
i know that log(u^v)=v*log(u) however if i take the log of both sides in the equation (1+.05t)=(1+1/23)^t I'm left with log (1+.05t)= t log (1+1/23) and im still left with log (1+.05t) on the left hand side and I'm not sure how to factor t out.

Sep 1 2013 11:52AM
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feihlination
Posts: 8356 - Karma: 1,084
^^yeah i didnt calculate it all the way. i am seriously stumped. i will probably kill myself when someone explains it to me, but right now i am not getting it. the solution is 7.37=t, but i cant figure it out without a math program.

Sep 1 2013 6:07PM
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the.hellion.
Posts: 861 - Karma: 698
Can't help you at all, however, I always read the title as Meth Help... gets me every time.



maybe ... google ?
Sep 1 2013 7:17PM
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tallteesteeze
Posts: 158 - Karma: 55
If you plug in 7.37 both sides do not end up equivalent

I tried googling, no help
Sep 2 2013 7:26PM
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motionmovement
Posts: 108 - Karma: 59
Yea so if it's compounded annually then I would say the answer is just period 7, I didn't do it but just checked over the work.

For B, I just glanced at it but I would use the formula...

future value = present value (1 + r) ^ (number of periods)

So using your numbers..

1.2 = 1.3 (1+r) ^2

and solve for r


Sep 2 2013 10:34PM
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tallteesteeze
Posts: 158 - Karma: 55
ive got another problem for anyone interested lol

carl puts 10000 into a bank account that pays an effective annual interest rate of 4% for 10 years, with interest credited at the end of each year. if a withdrawal is made during the first 5.5 years, a penalty of 5% of the withdrawal is made. Carl withdraws K at the end of each of years 4, 5 ,6 and 7. the balance in the account at the end of year 10 is 10000. calculate K

stumped as fuck
Sep 30 2013 4:13PM
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cowofawesome
Posts: 201 - Karma: 549
read it as 'meth problem help'
Sep 30 2013 4:32PM
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tallteesteeze
Posts: 158 - Karma: 55
thx for the help dood
Sep 30 2013 6:46PM
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Spagett+
Posts: 3499 - Karma: 14,884
Why have you already donated? you arnt even a cool person.
Sep 30 2013 6:48PM
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cowofawesome
Posts: 201 - Karma: 549
PEMDAS

And K is potassium
Sep 30 2013 7:57PM
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Spiri7o
Posts: 2163 - Karma: 1,100
omg
Sep 30 2013 10:03PM
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the_armidilo
Posts: 189 - Karma: 1,488
I need help to: what is a variable

I am 12.
Oct 1 2013 9:39AM
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tallteesteeze
Posts: 158 - Karma: 55
maybe cuz i wanted to support newschoolers? ive been a member longer than you so "already" isnt really appropriate in this situation
Oct 1 2013 9:40PM
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tallteesteeze
Posts: 158 - Karma: 55
+K for trying, however k=979.93. too bad i cant come to this answer. fuck this class.
Oct 3 2013 8:48PM
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