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10 points to best answer – can’t solve equation!?

09 Mar

It’s the “Future Value of an Ordinary Annuity” formula, but solving for the rate…
Here’s a picture of the equation:

http://i36.tinypic.com/99j2qe.png

I tried solving for r the best I could, even my math professor can’t figure it out… I’m hoping someone can help me, I’ll give 10 points to the the person that can best explain step-by-step how to tackle this thing.

I asked this question before, and I got an answer “just replace r/12 with x”. I tried working my way though with that too, but I can’t get rid of the exponent or anything… I just can’t figure this out!

Could someone good at mathematics please work though the problem and explain how to solve this?

 
2 Comments

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  1. nowaynohow

    March 9, 2010 at 10:36 am

    Let A = (r/12), so this is easier to type.

    S = 150((1 + A)^300 – 1)/A
    A*S/150 = (1 + A)^300 – 1
    0 = (1 + A)^300 -1 – (1 + A)*(S/150) + S/150

    Now you have a simple polynomial in (1+A).
    Try from there.

     

  2. ernairnp

    March 9, 2010 at 11:05 am

    The formula is incorrect. Please explain how you derived the formula.