Maturity value: $1400 principal, 16% rate, comp. quarterly  TOPIC_SOLVED

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Maturity value: $1400 principal, 16% rate, comp. quarterly

Postby spiritsoars54 on Sun Feb 15, 2009 2:45 am

I am having problems figuring out this problem with the eqation given, please HELP! :confused:

Principal: $1400, Rate: 16%, Compounded: Quarterly, Time: 6 years.

The formula: MV=P(1 + r/n) nt
r = yearly interest rate
n = number of periods the interest is compounded per year
t = term of the loan in years

Thanks for the help!
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Re: Maturity value: $1400 principal, 16% rate, comp. quarterly  TOPIC_SOLVED

Postby DAiv on Sun Feb 15, 2009 9:16 am

spiritsoars54 wrote:Principal: $1400, Rate: 16%, Compounded: Quarterly, Time: 6 years.

The formula: MV=P(1 + r/n) nt
r = yearly interest rate
n = number of periods the interest is compounded per year
t = term of the loan in years


I think the equation should be:



{ also written as MV = P(1 + r/n)^(nt) }


If so, just plug in the values given, bearing in mind that 16% = , and quarterly means 4 times a year.

The part is the exponent (or power), which in this case means multiply whatever is in the parentheses (round brackets) by itself times.

The caret symbol, ^, can be used to denote the exponent when proper formatting isn't available, e.g. x² can be written as x^2.


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