Finance

The result of your expression is=-254.286..., which is NOT what you are looking for!. I know you are trying to figure out some sort of an investment over 3-year or 36-month period? Right? You just tell me what you want and I will give you the answer.

I am getting the same result like you. Professor gave us some problems and it only gives the result not how to get there.

So here is the problem... its in german, so Im doing aproximate translation.

For your studies you obtained 15,000€, from that  you would like to pay running costs for the next 3 years.

Withdrawals are adjusted for monthly inflation rate of 0.125%

Yearly interest rate is 8%

What is the first and the last rate?

Suggested answers from the professor are 458,32€ and 478,80€

OK. I know what you are trying to figure out. It is rather complicated, but I got very close result to the Professor, which is as follows:

First payment I got is:458.35 Euros

Last payment I got is:478.83 Euros

Now, the first payment is right on the money. The last payment is about the same. The difference of a few pennies is due to rounding off errors. Good luck.

Thanks!

I know I set it up correctly i must be messing up with rounding the nummbers. I've gotten tow different results for first question 452.62 and 462,63

OK. I may have figured out your mistake. 8% is an annual effective rate. But, you must convert it to a monthly compoud rate, which is =7.720836132/12=.643403011, which is your monthly rate. Try it out and see if it makes any difference. Good luck.

I convert it and i got 0.006433403

sqrt12(1.08) -1

thanks for help