Prizewinner in a sweepstakes.

Quote from TGregg:

Yeah, 21.5 :)

(e^(21.52. . .)) -1 = ~19.5%
Whoops, that's backwrds. Too much crap going on. Reverse it:

(e^(~19.5)) -1 = 21.52. . .

Using a compounded continuously rate of 19.5%, you end up with $224,373.8732 taking $125k on day 1 and $224,364.1383 taking 3 payments of 50k. Less than $10 difference. Using a yield of 21.6% produces 224755.712 and 224635.0848 for a difference of ~$120. A yield of 21.5% produces a difference of ~$40.
More...

I was thinking of using cc to compare the answers...

But it's generally unheard of for a basic problem to use cc unless it's either specified in the question or in the pretext leading up to the question.

And 19.5 isn't an answer anyways.
 
Quote from PragmaticIdeals:

I was thinking of using cc to compare the answers...

But it's generally unheard of for a basic problem to use cc unless it's either specified in the question or in the pretext leading up to the question.

And 19.5 isn't an answer anyways.
More...

Yep on cc, especially since I just noticed the OP referred to intperpolating a table rather than using math. Either our understanding of the question is incomplete or none of the answers are correct with 21.6% being the most likely choice. Once you assume there's an error in the question or answers then it cannot be solved - you can only pick the answer most likely to be marked correct.

I suspect there may be additional factors that the OP didn't mention.
 
Quote from TGregg:
I suspect there may be additional factors that the OP didn't mention. [/B]
More...

Well, in the review questions I've been solving I found that the right answer is the closet one.

Quote from TGregg:
Using a yield of 21.6% produces 224755.712 and 224635.0848 for a difference of ~$120. A yield of 21.5% produces a difference of ~$40. [/B]
More...

How did you calculate the
224,755.712 ?

using F = A (F/A, 21.6%, 2) ???
 
You must log in or register to reply here.
Back
Top