1
$\begingroup$

I know this may seem like a stupid question but i've been up late working on this math assignment and this question just isn't working when i transpose it.

So this is the formula to find Present Value (PV) and I'm rearranging it to find PMT.

$$PV = PMT - \frac{1-(1 + i/k)^{-n} } {i/k}$$

PV = 429000
K = 12
N = 300
i = 5.11

Can someone link me to an annuity calculator!

$\endgroup$
  • $\begingroup$ So basically you're trying to find the monthly payment(PMT) of an annuity is it ? $\endgroup$ – ganeshie8 Aug 20 '14 at 11:53
  • 1
    $\begingroup$ is the edit correct? $\endgroup$ – Vikram Aug 20 '14 at 11:54
  • $\begingroup$ Yes I am trying to find the monthly payment using annuity! $\endgroup$ – user151764 Aug 20 '14 at 11:56
  • $\begingroup$ You have to use calculator to simplify the expressions, these finance calculations are difficult to carry out without calculator. Are you allowed to use calculator ? $\endgroup$ – ganeshie8 Aug 20 '14 at 11:57
  • $\begingroup$ Wait I am allowed to use a finance calculator but I need to show my steps of how I got to it. $\endgroup$ – user151764 Aug 20 '14 at 12:00
3
$\begingroup$

$PV = PMT\times \left(\dfrac{1-\left(1+\dfrac{i}{k}\right)^{-n}}{\dfrac{i}{k}}\right)$

Your goal is to isolate $PMT$, so simply divide :

$\dfrac{PV}{\left(\dfrac{1-\left(1+\dfrac{i}{k}\right)^{-n}}{\dfrac{i}{k}}\right)} = PMT$

Rearranging a bit you would get :

$\boxed{\dfrac{PV\times \dfrac{i}{k}}{1-\left(1+\dfrac{i}{k}\right)^{-n}} = PMT}$

Plugin the given values and evaluate !

$\endgroup$
  • $\begingroup$ Thanks man you're the best! $\endgroup$ – user151764 Aug 20 '14 at 12:57
  • $\begingroup$ you're welcome :) its a good idea to verify your work with wolfram : wolframalpha.com/input/?i=%28429000*%280.0511%2F12%29%29%2F%281-%281%2B0.0511%2F12%29%5E%28-300%29%29 $\endgroup$ – ganeshie8 Aug 20 '14 at 13:16

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.