If You Can Solve This Maths, A Financial Institution Should Employ You. - Education (2)

If You Can Solve This Maths, A Financial Institution Should Employ You. - Education (2) - Nairaland

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by ameer2: 11:50am On Aug 15, 2015

N22046.35

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 11:58am On Aug 15, 2015

Formular to find the FV of an annuity is P = PMT [((1 + r) n - 1) / r]

P = The future value of the annuity stream to be
paid in the future
PMT = The amount of each annuity payment
r = The interest rate
n = The number of periods over which payments
are made

Since it is compounded annually, each monthly payment of annuity is converted to an annual figure. i.e he saves #2000/month * 12 = #24000 annual payment.

applying the formular, #24000 [(( 1+0.12)^20 -1)/ 0.12] = #1,729,258.619

I hope i'm correct.

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 11:59am On Aug 15, 2015

FriedPlantain:
currently solving, answer coming out in next two minutes.

Walexy30,is the monthly payment made at the beginning or end of each month?

If the annupayment is at the end of

As you can see in the question, annually. But that does not mean you'll disregard the 'month" part of the question.

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:03pm On Aug 15, 2015

Thavybe:
Formular to find the FV of an annuity is P = PMT [((1 + r) n - 1) / r]

P = The future value of the annuity stream to be
paid in the future
PMT = The amount of each annuity payment
r = The interest rate
n = The number of periods over which payments
are made

Since it is compounded annually, each monthly payment of annuity is converted to an annual figure. i.e he saves #2000/month * 12 = #24000 annual payment.

applying the formular, #24000 [(( 1+0.12)^20 -1)/ 0.12] = #1,729,258.619

I hope i'm correct.

Bro, you came very close. May be calculation error somewhere.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Liamm(m): 12:07pm On Aug 15, 2015

537600

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:09pm On Aug 15, 2015

walexy30:
Bro, you came very close. May be calculation error somewhere.

Nope, my calculations are correct. if there is a mistake, then it means that i didn't apply the correct formular.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by fragrant(f): 12:20pm On Aug 15, 2015

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:20pm On Aug 15, 2015

Thavybe:
Nope, my calculations are correct. if there is a mistake, then it means that i didn't apply the correct formular.

Which was why I was asking him if the monthly payments are made at the beginning or end of each month. Your calculation was correct, jarey

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by rapins: 12:24pm On Aug 15, 2015

[quote author=walexy30 post=36977294][/quote]How much will you pay me in the bank?
Amount to be received= 10818677888601600

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:28pm On Aug 15, 2015

FriedPlantain:
Which was why I was asking him if the monthly payments are made at the beginning or end of each month. Your calculation was correct, jarey

Whether at the beginning or the end, the cash flow runs 240 times. I make the deposits 240 times during the period

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:31pm On Aug 15, 2015

FriedPlantain:
Which was why I was asking him if the monthly payments are made at the beginning or end of each month. Your calculation was correct, jarey

Yes, but the answer is wrong. 240 monthly payments of #2000 compounded at an annual rate of 12% will give a slightly higher value than my answer. what i have just done was a 20 #24000 yearly payment at a compounding rate of 12%.

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:33pm On Aug 15, 2015

walexy30:
Whether at the beginning or the end, the cash flow runs 240 times. I make the deposits 240 times during the period

I get u, the solution to answering this thing is a matter of knowing the right formular.

Make i try am again, if i no get am this time, then OP i give up.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:35pm On Aug 15, 2015

Thavybe:
I get u, the solution to answering this thing is a matter of knowing the right formular.

Make i try am again, if i no get am this time, then OP i give up.

Bro, you are good! Try again.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by prinzayf(m): 12:37pm On Aug 15, 2015

1978510.731

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:39pm On Aug 15, 2015

walexy30:
Whether at the beginning or the end, the cash flow runs 240 times. I make the deposits 240 times during the period

Yeah, you are right. I think where we are making the mistake is compounding the interest of the first month of payment. Wait, I'm coming with a better answer soon

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by alsudaes1(m): 12:40pm On Aug 15, 2015

#231,511.03

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:41pm On Aug 15, 2015

Thavybe:
Yes, but the answer is wrong. 240 monthly payments of #2000 compounded at an annual rate of 12% will give a slightly higher value than my answer. what i have just done was a 20 #24000 yearly payment at a compounding rate of 12%.

That is if the interest is compounded monthly and not annually. Or that is just what I assume.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:47pm On Aug 15, 2015

prinzayf:
1978510.731

Yes, you got it. But let's see the calculations.

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:54pm On Aug 15, 2015

You can see the power compounding, N2,000 savings every month with assumed interest rate of 12% will fetch you N1,978,510.72k in the next twenty years.

Maths is good! i love it especially financial maths.

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:55pm On Aug 15, 2015*

The monthly interest rate is 1%

Fv = pv ((1+r)ⁿ-1)/r

Fv = 2,000[(1+0.01)²⁴⁰-1]/0.01

=N1,978,510.73

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:56pm On Aug 15, 2015

prinzayf:
1978510.731

Bros show us ur calculations abeg.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by AdeniyiA(m): 12:57pm On Aug 15, 2015

walexy30:
Solve it and post your answer

well, I have a formula I derived here...
480,000 + 0.12(A1+A2+A3+- - - A19)

In the end I got
#542,128.22

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Ekpekus(m): 1:00pm On Aug 15, 2015

2,142,857.3

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 1:00pm On Aug 15, 2015

walexy30:
You can see the power compounding, N2,000 savings every month with assumed interest rate of 12% will fetch you N1,978,510.72k in the next twenty years.

Maths is good! i love it especially financial maths.

You can only use the "rate equivalent approach" to solve this thing. i am only interested in the formular you used.

This stuff is finance related o, are you studying accounting or studied accounting?

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 1:01pm On Aug 15, 2015

If the Monthly saving is N10,000, we can even extrapolate with N9,892,553.60k in the next twenty years.

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by prinzayf(m): 1:05pm On Aug 15, 2015

Thavybe:
Bros show us ur calculations abeg.

convert d annual interest rate to monthly interest rate 240 monthly payments
of #2000

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 1:06pm On Aug 15, 2015

Thavybe:
You can only use the "rate equivalent approach" to solve this thing. i am only interested in the formular you used.

This stuff is finance related o, are you studying accounting or studied accounting?

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

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