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If You Can Solve This Maths, A Financial Institution Should Employ You. - Education (18) - Nairaland

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Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by DesChyko: 5:27pm On Aug 16, 2015
Kennedyiheme:
the question didn't say he withdrew anytin, the question is straight and simple. "How much interest will he get at the end of 20yrs for saving 2000 monthly, at 12%......no bank will give u 19million naira bccos u saved 480,000....it won't happen anywere in the world
The question didn't ask about interest alone. Says 'How much will I receive'.
It isn't that straight forward. The bank uses the cash before paying interest right? Interest can't be paid on the whole cash at once because they didn't get to use all of it at once.
My figure is #1,058,400 consisting of Principal of #480,000 and Intrest of #578400
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by emmyojo22(m): 5:32pm On Aug 16, 2015
irenmwinfo:
This is pure Economics not Mathematics to calculate just use this formulae. FUTURE WORTH= PRESENT VALUE( 1+ INTEREST RATE ^Number OF YEARS) I.e FV= PV (1 + r^20 )
Fv ?
Pv= #2000
r= 12% I.e 0.12 remember it's in %
n= 20years
Therefore, FV= 2000 (1+ 0.12^20) = 2000 ( 1.12^20)
2000 X 9.646293093 = #19,292.58619
Thank you all I think you are convinced now like if you love ❤ Economics + Mathematics
The^ 20 is should come after the bracket (1+r)^20
From an Economics student
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by DonWhest: 5:35pm On Aug 16, 2015
KLand:
THE ANSWER IS: N19,982,958.38

SEE THE CALCULATION HERE: http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

Year Year Deposits Year Interest Total Deposits Total Interest Balance

1 N240,000.00 N16,186.56 N240,000.00 N16,186.56 N256,186.56
2 N240,000.00 N48,677.43 N480,000.00 N64,863.99 N544,863.99
3 N240,000.00 N85,288.95 N720,000.00 N150,152.94 N870,152.94
4 N240,000.00 N126,543.73 N960,000.00 N276,696.68 N1,236,696.68
5 N240,000.00 N173,030.65 N1,200,000.00 N449,727.33 N1,649,727.33
6 N240,000.00 N225,413.28 N1,440,000.00 N675,140.61 N2,115,140.61
7 N240,000.00 N284,439.33 N1,680,000.00 N959,579.94 N2,639,579.94
8 N240,000.00 N350,951.37 N1,920,000.00 N1,310,531.31 N3,230,531.31
9 N240,000.00 N425,898.79 N2,160,000.00 N1,736,430.10 N3,896,430.10
10 N240,000.00 N510,351.43 N2,400,000.00 N2,246,781.53 N4,646,781.53
11 N240,000.00 N605,514.77 N2,640,000.00 N2,852,296.30 N5,492,296.30
12 N240,000.00 N712,747.20 N2,880,000.00 N3,565,043.50 N6,445,043.50
13 N240,000.00 N833,579.40 N3,120,000.00 N4,398,622.90 N7,518,622.90
14 N240,000.00 N969,736.14 N3,360,000.00 N5,368,359.03 N8,728,359.03
15 N240,000.00 N1,123,160.96 N3,600,000.00 N6,491,519.99 N10,091,519.99
16 N240,000.00 N1,296,043.89 N3,840,000.00 N7,787,563.88 N11,627,563.88
17 N240,000.00 N1,490,852.70 N4,080,000.00 N9,278,416.58 N13,358,416.58
18 N240,000.00 N1,710,368.15 N4,320,000.00 N10,988,784.72 N15,308,784.72
19 N240,000.00 N1,957,723.64 N4,560,000.00 N12,946,508.37 N17,506,508.37
20 N240,000.00 N2,236,450.01 N4,800,000.00 N15,182,958.38 N19,982,958.38



Your "brute force approach" to this problem is commendable. However it is faulty because you are using N240, 000 yearly to Compute the yearly interest. Remember that of this N240,000

in the 1st year,
Only N2,000 stayed complete 1 year with the bank
Another N2,000 stayed with the bank for 11 months
Another N2,000 for 10 months etc

this same sinaro occur each year: 2ndd , 3rd up to the 20th year

Your Computation had assumed several bulk of N240,000 is being deposited yearly.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Hulkreal: 5:58pm On Aug 16, 2015
The answer is 297,600 shikenah
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Aproxy: 6:04pm On Aug 16, 2015
-this is the answer:--$1,978,510.73

Fv on excel...
Pmt-2000#
Rate--1%--0.01%
Period--240
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by coretechng1(m): 6:16pm On Aug 16, 2015
I still don't get why people are saying 1% = 0.1

This is absolutely wrong.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Kumson(m): 6:17pm On Aug 16, 2015
walexy30:
I save N2000 every month in a bank with an annual interest rate of 12% for 20 years while still working. How much will i receive at the end of the period (20 years).
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by futurewise11(m): 7:28pm On Aug 16, 2015
adedayor08:
using the formula pv((1+r)-1)"n/r

am a graduate of banking and finance ask me anything


pv is th 20000
r is 0.12 ie 12 percent
n is 20 years

mr graduate your n is wrong.monthly deposit for 20 years mean 240.

viele Dank
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 7:37pm On Aug 16, 2015
lot of answers here calls for concern... seem some dude haven't heard of BALANCE BROUGHT FORWARD (bf) IN BANKING....




still wondering...... next time waec or jamb releases result n % failure is high.... this is exactly what took place.. not like d candidates r dull but........
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by enambobo(m): 8:04pm On Aug 16, 2015
walexy30:
I save N2000 every month in a bank with an annual interest rate of 12% for 20 years while still working. How much will i receive at the end of the period (20 years).
This is a future woth- annuity problem.
Using the series compound amount factor formula,
FW= A [(1+i)^n - 1)]/ i.
Where FW= future worth
A=annuity
i= interest rate
n= no. Of years.
i= 12/12= 1%=0.01
A=N2000
n= 20*12= 240 months

Therefore, FW= 2000[(1+0.01)^240 -1)]/ 0.01
= 2000*989.2554
= N1,978 510.73 Ans

4 Likes

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Sesanogun(m): 9:00pm On Aug 16, 2015
27272
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 9:39pm On Aug 16, 2015
walexy30:
I save N2000 every month in a bank with an annual interest rate of 12% for 20 years while still working. How much will i receive at the end of the period (20 years).

I was banned for 24hrs by NL Antispam BOT. Whatever that means. Let me thank Mr. C.A Jegede of LASU (Banking & Finance Dept.) for his educative textbook titled 'Fundamentals of Investment Decisions'. Greetings to all LASU Banking & Finance Dept. (School of Part time Studies Degree Ojo) 2006/2007 set.

Solution: The formula is Annuity Cash flow formula FV annuity= CF(1+i)^n -1 (division)
. i
CF= Cash flow
n= number of times deposit was made
i= interest rate

From the Question,
CF = 2,000

n= 20 years x 12 months=240 times

i = 12%/12 months to get the monthly interest as 1%
or 0.01

Let's input these in the formula above

. 2,000. {1+0.01}^240. - 1. (division)
. 0.01

. (1.01]^240) -1. (division)
. 0.01

. 10.89255-1. (division)
. 0.01

. 9.89255. (division)
. 0.01

. 989.255

. Now, multiply it by the CF of 2,000

2,000 x 989.255

N1,978,510 Approx.

So, After 20 years, I will receive the above sum. This can be applied in real life as you can plan the financial future of your child. Thank you all for making the thread a huge success.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 10:03pm On Aug 16, 2015
Any question?
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by tunergy(m): 11:50pm On Aug 16, 2015
walexy30:


I was banned for 24hrs by NL Antispam BOT. Whatever that means. Let me thank Mr. C.A Jegede of LASU (Banking & Finance Dept.) for his educative textbook titled 'Fundamentals of Investment Decisions'. Greetings to all LASU Banking & Finance Dept. (School of Part time Studies Degree Ojo) 2006/2007 set.

Solution: The formula is Annuity Cash flow formula FV annuity= CF(1+i)^n -1 (division)
. i
CF= Cash flow
n= number of times deposit was made
i= interest rate

From the Question,
CF = 2,000

n= 20 years x 12 months=240 times

i = 12%/12 months to get the monthly interest as 1%
or 0.01

Let's input these in the formula above

. 2,000. {1+0.01}^240. - 1. (division)
. 0.01

. (1.01]^240) -1. (division)
. 0.01

. 10.89255-1. (division)
. 0.01

. 9.89255. (division)
. 0.01

. 989.255

. Now, multiply it by the CF of 2,000

2,000 x 989.255

N1,978,510 Approx.

So, After 20 years, I will receive the above sum. This can be applied in real life as you can plan the financial future of your child. Thank you all for making the thread a huge success.


Thank you very much
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by ekenedilichukwu: 7:50am On Aug 17, 2015
Here it is:

N 23,151.10 naira
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by itopicman: 8:29am On Aug 17, 2015
walexy30:
I save N2000 every month in a bank with an annual interest rate of 12% for 20 years while still working. How much will i receive at the end of the period (20 years).

1) This is a complex form of a Compound Interest question. (Reason: You need to keep on adding the monthly savings he makes per month.)
The mistake from many is to assume a one-time principal.
For clarity, at the end of the first year, the Principal = #2000 x 12 = #24000. 12% interest on this gives 24000 x 0.12 = 2880.
At the end of the 2nd year, the New Principal = (Principal of year 1) + (Savings/principal of year 2) + Interest from year 1 = 24000 +24000 +2880 = 50880. Interest from year 2 = 50880 x 0.12 = 6105.6. At the end of year 3, the New Principal = (year 1 principal) + (year 2 principal) + (year 3 principal) + (Interest from year 2) = 24000 + 24000 + 24000 + 6105.6 = 78105.6. and on and on like that.
As a mathematics teacher, I computed an analytical equation for this 'progressive compound interest' problem thus.

Amt=yp*(n+(n*x)+((n-1)*x^2)+((n-2)*x^3)+((n-3)*x^4)+((n-4)*x^5)+((n-5)*x^6)+((n-6)*x^7)+((n-7)*x^cool+((n-cool*x^9)+((n-9)*x^10)+((n-10)*x^11)+((n-11)*x^12)+((n-12)*x^13)+((n-13)*x^14)+((n-14)*x^15)+((n-15)*x^16)+((n-16)*x^17)+((n-17)*x^18)+((n-18)*x^19)+(x^20))
yp = yearly savings/principal = #24000,
n = number of years = 20,
x = interest rate per annum = 12% = 0.12,
Amt = Amount at the end of 20 years
Amt = # 545,010.
This is an adjusted solution to correct an error in the former.
This answer should be CORRECT.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by enambobo(m): 9:46am On Aug 17, 2015
walexy30:


I was banned for 24hrs by NL Antispam BOT. Whatever that means. Let me thank Mr. C.A Jegede of LASU (Banking & Finance Dept.) for his educative textbook titled 'Fundamentals of Investment Decisions'. Greetings to all LASU Banking & Finance Dept. (School of Part time Studies Degree Ojo) 2006/2007 set.

Solution: The formula is Annuity Cash flow formula FV annuity= CF(1+i)^n -1 (division)
. i
CF= Cash flow
n= number of times deposit was made
i= interest rate

From the Question,
CF = 2,000

n= 20 years x 12 months=240 times

i = 12%/12 months to get the monthly interest as 1%
or 0.01

Let's input these in the formula above

. 2,000. {1+0.01}^240. - 1. (division)
. 0.01

. (1.01]^240) -1. (division)
. 0.01

. 10.89255-1. (division)
. 0.01

. 9.89255. (division)
. 0.01

. 989.255

. Now, multiply it by the CF of 2,000

2,000 x 989.255

N1,978,510 Approx.

So, After 20 years, I will receive the above sum. This can be applied in real life as you can plan the financial future of your child. Thank you all for making the thread a huge success.
correct...thanks for creatin the tread.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by fadeyiolowo: 9:48am On Aug 17, 2015
shrink007:
You get a total of 1,936,769.71 at the end of 20 years. I know i'm correct

You are 100% correct.
I got the same answer.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by fadeyiolowo: 10:23am On Aug 17, 2015
walexy30:


I was banned for 24hrs by NL Antispam BOT. Whatever that means. Let me thank Mr. C.A Jegede of LASU (Banking & Finance Dept.) for his educative textbook titled 'Fundamentals of Investment Decisions'. Greetings to all LASU Banking & Finance Dept. (School of Part time Studies Degree Ojo) 2006/2007 set.

Solution: The formula is Annuity Cash flow formula FV annuity= CF(1+i)^n -1 (division)
. i
CF= Cash flow
n= number of times deposit was made
i= interest rate

From the Question,
CF = 2,000

n= 20 years x 12 months=240 times

i = 12%/12 months to get the monthly interest as 1%
or 0.01

Let's input these in the formula above

. 2,000. {1+0.01}^240. - 1. (division)
. 0.01

. (1.01]^240) -1. (division)
. 0.01

. 10.89255-1. (division)
. 0.01

. 9.89255. (division)
. 0.01

. 989.255

. Now, multiply it by the CF of 2,000

2,000 x 989.255

N1,978,510 Approx.

So, After 20 years, I will receive the above sum. This can be applied in real life as you can plan the financial future of your child. Thank you all for making the thread a huge success.

Thank you Walexy30 for this challenging post. If I should rate it I will rate it the best post for the year in NL. More of it.

Walexy30, try to understand ur question very well. the question did not say "with a monthly interest rate of 1% which will amount to 12% interest yearly" but the question says " with an annual interest rate of 12%" which implies that the interest will not be charged on monthly basis but yearly. After each year the interest is calculated and added to the total savings to date. From your calculation you calculated the interest on monthly basis for a period of 240 months which should not be so. The question is after yearly (20 years) interest and not monthly interest. Thank you.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Rilwayne001: 10:42am On Aug 17, 2015
Business Finance.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 10:51am On Aug 17, 2015
fadeyiolowo:


Thank you Walexy30 for this challenging post. If I should rate it I will rate it the best post for the year in NL. More of it.

Walexy30, try to understand ur question very well. the question did not say "with a monthly interest rate of 1% which will amount to 12% interest yearly" but the question says " with an annual interest rate of 12%" which implies that the interest will not be charged on monthly basis but yearly. After each year the interest is calculated and added to the total savings to date. From your calculation you calculated the interest on monthly basis for a period of 240 months which should not be so. The question is after yearly (20 years) interest and not monthly interest. Thank you.

Thank you! But the deposits are made on a monthly basis not on yearly basis. So, you have to reduce the annual rate to monthly. Because as a financial institution, you have to be paying the depositor his interest every month as he deposits every month.

Moreover, if he is to be depositing every week, you have to divide the annual rate by 52 to get the weekly rate.

So, it is correct to divide by 12 for monthly interest. Thank you.

1 Like

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 10:58am On Aug 17, 2015
fadeyiolowo:


Thank you Walexy30 for this challenging post. If I should rate it I will rate it the best post for the year in NL. More of it.

Walexy30, try to understand ur question very well. the question did not say "with a monthly interest rate of 1% which will amount to 12% interest yearly" but the question says " with an annual interest rate of 12%" which implies that the interest will not be charged on monthly basis but yearly. After each year the interest is calculated and added to the total savings to date. From your calculation you calculated the interest on monthly basis for a period of 240 months which should not be so. The question is after yearly (20 years) interest and not monthly interest. Thank you.

Remember, this is Applied Mathematics. As a banker or financial expert, you must credit the depositor as at when due. You don't wait for the end of the year before you credit someone who deposits every month. That will be an injustice and a financial crime.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by onyebuchiii(m): 10:59am On Aug 17, 2015
6800
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by onyebuchiii(m): 11:00am On Aug 17, 2015
noooo i didn't read d question well...not 6800
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by BCJAY(f): 11:17am On Aug 17, 2015
I greet and respect all that solve the maths correctly. To be sincere i envy you guys but me and maths friendship level no reach this stage o. God bless you all
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Kennedyiheme: 11:42am On Aug 17, 2015
BCJAY:
I greet and respect all that solve the maths correctly. To be sincere i envy you guys but me and maths friendship level no reach this stage o. God bless you all
its not maths, its accounting/economics.
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Kennedyiheme: 11:46am On Aug 17, 2015
The question didn't say u shld calculate the 12% monthly, but the interest of his deposit at the end of 20years....very straight.....this thing is getn boring and annoyin when the op doesn't wonna post the answer
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:18pm On Aug 17, 2015
Kennedyiheme:
The question didn't say u shld calculate the 12% monthly, but the interest of his deposit at the end of 20years....very straight.....this thing is getn boring and annoyin when the op doesn't wonna post the answer

I have posted the answer. Look up!
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by galantjoe(m): 8:14pm On Aug 17, 2015
Aproxy:
-this is the answer:--$1,978,510.73

Fv on excel...
Pmt-2000#
Rate--1%--0.01%
Period--240

that is the answer.

1 Like 1 Share

Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by stlaibrowne(m): 8:33pm On Aug 17, 2015
galantjoe:


that is the answer.

Now all y'all management accountant, stockers, commercial students do you know of any share or stock one can invest such money to according to the question in real life
Re: If You Can Solve This Maths, A Financial Institution Should Employ You. by Nobody: 12:00am On Aug 18, 2015
stlaibrowne:


Now all y'all management accountant, stockers, commercial students do you know of any share or stock one can invest such money to according to the question in real life

If you see any stock with the following:

P/E ratio of 5 and below

dividend paying history

steady scrip issues

and strong total asset/issued cap. ratio.

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