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Old 11-04-2007, 04:48 PM
Garland Garland is offline
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Join Date: Dec 2003
Location: San Francisco, CA
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Default Re: Simple Compound Interest Calculation Question + [bonus question]

[ QUOTE ]
First Question,
N=2.06
I=7.6
PV=-3,000
FV=3,488.63

Bonus
N=12
I=9
PV=2000
PMT=700
FV=19,723.83

[/ QUOTE ]

Thank you for your reply. I've been told that the first cannot be done without being told how to handle the fraction year interest: simple or compound. So the question was ambiguous.

As for the bonus question, I agree with your calculations: $19723.83 through a variety of methods. The book kept saying “16,667.15.” And I know they didn’t accumulate $1300 in their work [The split the initial $2000 deposit to $1300 and $700 ($700 to include in the annuity).

There are a lot of bad questions and answers in this book. Time to throw it away.

Garland
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