- This topic has 7 replies, 5 voices, and was last updated Jul-181:26 am by
.
-
Posts
-
-
Up4
It took me two hours when I was studying l1 to figure this out 🙂
-
Up3
Wouldn’t you use the calculator’s TVM functions to get to [PMT] –> [CPT]? No need to know how to do algebra.
-
Up3
If the Z terms are not the same, the TVM functions won’t help you since they only allow for 1 discount rate. You need to set up the equation in terms of each period’s discount rate.
-
Up3
Prash, you can’t use the TVM functions of an HP12C for problems with more than one discount rate.
-
Up2
you can use tvm function
-
Up1
OK. I figured it out. I was right it was silly and easy. Use the distributive property. All the PMT/(1+Z) terms can be rewritten as PMT x (1/1+Z1) + PMT x (1/(1+Z2)^2) + … PMT x (1/(1+ZN)^N + 100 x (1/(1+ZN)^N. All the 1/1+Z terms can be grouped so you get PMT ((1/1+Z1) + (1/(1+Z2)^2 + etc.) + 100 x (1/(1+ZN)^N = 100. The last term is the face value discounted for N periods. Solve all the 1/Z terms and the 100/(1+ZN)^N. So you get PMT = (100 – (100/(1+ZN)^N))/(the sum of all the 1/1+Z terms)
Sorry if I wasted anyone’s time.
-
Up1
haha. yeah, the CFAI is great at letting you figure out how a formula operates. I watched a number of youtube videos. It was really helpful learning how to use the calculator for SD calcs and others! I remember seeing geometric mean the first time and not knowing how to calculate with my calculator. Seems silly, but we have all been there in one formula or another.
-
- You must be logged in to reply to this topic.