walexy30:


I am a school cert. holder but tutored in LASU. Thanks to Mr. C.A. JEGEDE (Banking anf Finance Dept.) for his educative textbook.

prinzayf:
#2000 [(( 1+0.01)^240 -1)/ 0.01] = #1,978,510.73

rapins:


How much will you pay me in the bank?
Amount to be received= 10818677888601600

sureguy02:
The monthly interest rate is 1%

Fv = pv ((1+r)ⁿ-1)/r

Fv = 2,000[(1+0.1)²⁴⁰-1]/0.1

=N1,978,510.73

prinzayf:
#2000 [(( 1+0.01)^240 -1)/ 0.01] = #1,978,510.73

Thavybe:
Bros show us ur calculations abeg.

FriedPlantain:
Walexy30, check my answer below

N1, 998,295.84

Where A = monthly payment
Where r= monthly interest
Where n = number of years
Where m = number of months

Where rate per month = 12‰/12 years
= 1% per month

Assuming the monthly payments were made at the beginning of each month

Fv =A(1+r)[(1+r)^n*m - 1] /r

Fv = 2000 (1+ 0.01) [(1+0.01)^240 - 1]/ 0.01

= 2020 [(1.01^240) - 1]/0.01

=2020 * (989.255)

=N1,998,295.84

Alcheringa:
PMT * (((1 + r/n)^nt - 1) / (r/n))
Where:
A = the future value of the investment/
loan, including interest
P = the principal investment amount (the
initial deposit or loan amount)
PMT = the monthly payment
r = the annual interest rate (decimal)
n = the number of times that interest is
compounded per year
t = the number of years the money is
invested or borrowed for


2000*(((1+0.12/12)v12*20) - 1)/(0.12/12)) :
Equals 2000*((1.01)v240 - 1) * (12/0.12)) :
Equals 2000*(9.893 * 100) :
Equals. #1,978,510.73

N.b: v means raised to the power. for this calculation due to the sign unavailability.

lynnj:
Answer is= 20 yrs × 12 months every year = 240 months
240 months × 30 days in a month= 7200.
Simple interest calculation applies.
12÷100×2000×7200=1,728,000. Answer= 1,728,000.

AdeniyiA:
I am yet to understand how 480,000 would turn 1.9m in 20 yrs

walexy30:

No, simple interest does not apply here

stlaibrowne:
I don't agree with the calculations above and I strongly believe the op doesn't know the answer to the question he asked I was an engineering student not accounting nor commerce but yet I believe the formula used is not appropriate.
Reason : you have to acknowledge that the investor still contribute 2000 from his salary every year till the 20th year which means the interests and principals will vary every year as the year rises so it's not possible to use a constant value for the accurate return on investment.
I have done my calculations and the answer is
#161, 397.47086406. Final answer

stlaibrowne:
I don't agree with the calculations above and I strongly believe the op doesn't know the answer to the question he asked I was an engineering student not accounting nor commerce but yet I believe the formula used is not appropriate.
Reason : you have to acknowledge that the investor still contribute 2000 from his salary every year till the 20th year which means the interests and principals will vary every year as the year rises so it's not possible to use a constant value for the accurate return on investment.
I have done my calculations and the answer is
#161, 397.47086406. Final answer

stlaibrowne:
I don't agree with the calculations above and I strongly believe the op doesn't know the answer to the question he asked I was an engineering student not accounting nor commerce but yet I believe the formula used is not appropriate.
Reason : you have to acknowledge that the investor still contribute 2000 from his salary every year till the 20th year which means the interests and principals will vary every year as the year rises so it's not possible to use a constant value for the accurate return on investment.
I have done my calculations and the answer is
#161, 397.47086406. Final answer

AdeniyiA:
I am yet to understand how 480,000 would turn 1.9m in 20 yrs

FriedPlantain:
Haba Bros your answer is obviously wrong. If the investor decides to keep his money under his bed for ten years alone, he would obviously earn more than the answer you calculated above.

2000 per month for ten years is higher = 240,000

walexy30:

You are funny, this is finance not engineering. No matter how good you are in engineering math, you can't be better than a financial mathematician when it comes to mathematics of finance.

Drahl:
@OP,I don't agree with ur calculations.I'm a computer engineering graduate bt that doesn't matter.
Why would u divide the rate by 12? And secondly future value of money is calculated annually.

walexy30:


You have to bring it down to month because the depositor pays the money into his account every month not every year.

Drahl:


Ok..I see.

prinzayf:
#2000 [(( 1+0.01)^240 -1)/ 0.01] = #1,978,510.73

walexy30:


Ni problem, youcan confirm the answer by calculating the interest on the capital month in month out for the next 20 years. You'll arrive the same figure.

The formular is tested with universal acceptance.

AdeniyiA:


But since the interest is calculated annually ,methinks that the deposits from February to December of the twentieth year shouldn't attract any interest.

Though so far the interests have 'monthlitized' by dividing the 12% by 12.
Or we should just assume the 20yrs?