Question

Help here please:)

Determine an interest rate less than 15%

Answer 1

is it a simple interest problem??

Answer 2

the question is put up in a quite difficult way ..
is it just asking to find the rate if you receive 500k for a million in two years??

Answer 3

lol ... that what i hate about these type of questions. do you have answer?? if you have answer we might construct as well as simplify question

Answer 4

damn silly question

it says that t=? for A = 2P for r<15%

Answer 5

let's put rate is 15 percent
By the way, are you from english speaking country??

Answer 6

I am not ... though it would seem you have more problem than me.

Answer 7

lol ... nevermind. thats just a joke.

Answer 8

it wouldn't be so wrong to put 15% just for now.

Answer 9

it doesn't say anything about how many times it get's compounded in a year

or it is saying, it get's compounded every two years.

Answer 10

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php#interestpaid

Answer 11

seems like i did not take regular deposit into account.

Answer 12

Where is it written that $500k has to be earned? That was an illustration of the meaning of the question, I thought.

(***for example***, under what conditions will you have a future value of $1 000 000, having earned $500 000 interest?)
But not the question.

Answer 13

Agree, the question creates more questions.

Answer 14

Use the FV formula here.
\( FV= pmt \cdot \frac{(1+i)^n-1}{i} \)

The total amount of money you put in is the payment amount times the number of payments: n*pmt
We want the Future value to be twice what you put in: 2*n*pmt
Plug this into the formula
\( 2*n*pmt= pmt \cdot \frac{(1+i)^n-1}{i} \)
or
\( 2n=\frac{(1+i)^n-1}{i} \)

Answer 15

To keep things simple, let's put money in once a year, and have the interest rate 10% per year.
\[ 2n=\frac{(1.1)^n-1}{0.1} \]

Answer 16

What are they asking:
Determine an interest rate less than 15%, a period of investment greater than two years, and a regular payment that will result in the total amount of interest you earn being equal to the total amount of money you put in?

They are asking you to pick a set of numbers (interest, payment size, investment time) so that at the end of the time period, you will have doubled your money.
So I am going to assume 10% interest rate, and assume we put in a payment once a year.
How long do we have to go to double our money?

Answer 17

He was suggesting 10%, did you plug in 10% or 1%?

Answer 18

I am here. was waiting for answer to my question.

Answer 19

I see you have answered it.

Answer 20

We could try making payments monthly to see if it matters.

Answer 21

It that a regular payment or just a single deposit at the start?

Answer 22

What is the total amount of money you put in?

Answer 23

They want (for example, under what conditions will you have a future value of $1 000 000, having earned $500 000 interest?)

So if the FV is 80000 they want the interest to be 40000

Answer 24

Yes. Try 10% per year, and 14 years

Answer 25

Yes, it is very very close

Answer 26

I'm just saying 2*139749= 279498 which is close enough!

Answer 27

To get the exact number of years we have to solve
\( 0.2n+1 =(1.1)^n \)
for n

Answer 28

which I can do using Wolfram.

Answer 29

Yes, especially if you make a note of the small difference.

Answer 30

Here is a link to Wolfram's solution
http://www.wolframalpha.com/input/?i=.2n%2B1+%3D+1.1%5En+
It is the 2nd red dot, about 14.02 years

Answer 31

Time to go. Good luck with this stuff....