is this correct?
- Thread starter Hiva
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Deleted member 4993
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Looks good to me!!
Thank you!
jonah2.0
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- Apr 29, 2014
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- 618
With the present as the focal date, we have
`694,039.92=M*(1-(1+.027/12)^(-20*12))/(.027/12)`
Sorry I don't understand what this means?
jonah2.0
Full Member
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- Apr 29, 2014
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Beer induced filibustering follows.
`694,039.92=M*(1-(1+.027/12)^(-20*12))/(.027/12)=M*(1-(1+.027/12)^(-240))/(.027/12)impliesM=3,745.73457903...`
Translation: My equation of value which used the present (point zero on the number line) as the comparison date and your equation of value when used the 240th month (point 240 on the number line) as the comparison date yields the same monthly payment. My equation of value simply discounted all future payments to the present time (again, point zero on the number line) whereas yours accumulated all future payments to the end of the 240th month. Symbolically, mine says
`694,039.92=M(1+i)^(-1)+M(1+i)^(-2)+ ... +M(1+i)^(-240)=M*(1-(1+i)^(-240))/i`
while yours says
`694,039.92(1+i)^240=M(1+i)^239+M(1+i)^238+ ... +M(1+i)+M=M*((1+i)^240-1)/i`
where `i=.027/12`
It simply means that
`694,039.92=M*(1-(1+.027/12)^(-20*12))/(.027/12)=M*(1-(1+.027/12)^(-240))/(.027/12)impliesM=3,745.73457903...`
Translation: My equation of value which used the present (point zero on the number line) as the comparison date and your equation of value when used the 240th month (point 240 on the number line) as the comparison date yields the same monthly payment. My equation of value simply discounted all future payments to the present time (again, point zero on the number line) whereas yours accumulated all future payments to the end of the 240th month. Symbolically, mine says
`694,039.92=M(1+i)^(-1)+M(1+i)^(-2)+ ... +M(1+i)^(-240)=M*(1-(1+i)^(-240))/i`
while yours says
`694,039.92(1+i)^240=M(1+i)^239+M(1+i)^238+ ... +M(1+i)+M=M*((1+i)^240-1)/i`
where `i=.027/12`