How much profit does he make?
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Please share your work/thoughts and context of the problem (what is the subject topic?) - so that we know where to begin to help you.
Hint: what is the monthly rate?
How many months in 4 years?
Hi Khan,
Thats what I did
Annual profit= 36,000 x10%= 3600x4 years= 14400
Monthly profit = 36,000/12 months = 300
The profit for the first
14400
+
14400 - ( 300)
+
14400 - (600)
+
14400 - (900)
+
14400 - (12000)
I continued till I reached 14400 - (300x48 months)
The answer was -47178300!!!!!!!!!
Hi Lev
The annual interest for the first month salary for 4 years = 14400
The annual interest for the second month salary for 4 years is 14400 - one month (because it is 11 months+3 years)
That's how I'm thinking the deposit certificate calculation will be.
Yes.
lev888
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I am not sure whether you are calculating interest correctly (what about compounding?), but you should not have a negative answer in any case. So, how did you get -47178300? You are always adding 14400 and subtracting 0, 300, etc. What's the last subtracted amount?
The last one is 14400 - (300x48 months)
Generally, do you think the steps of my calculations are correct?
lev888
Elite Member
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Your calculations should not produce a negative answer, that's for sure. I am not a CPA, so you need to double check whether your understanding of deposit certificate is correct.
So, your negative term is never greater than the positive. How are you getting a negative total? How did you calculate the sum?
I used a calculator.
lev888
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If you are taking a class, what is the topic?
lev888
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Assuming your setup is correct, let's look at the calculation:
14400 +
14400 - ( 300) +
...
14400 - (300x48)
Note that we have 49 terms there. Should be 48...
49*14400 - 300 * (0 + 1 + 2 + ... + 48) = 705,600 - 300 * ( 49*48/2) = 352,800
Better than -47178300, but I am afraid this is still incorrect - total salary for 4 years is 144,000. 352,800 in interest is a bit too much.
Can you look up the terms for your investment account?
14400 +
14400 - ( 300) +
...
14400 - (300x48)
Note that we have 49 terms there. Should be 48...
49*14400 - 300 * (0 + 1 + 2 + ... + 48) = 705,600 - 300 * ( 49*48/2) = 352,800
Better than -47178300, but I am afraid this is still incorrect - total salary for 4 years is 144,000. 352,800 in interest is a bit too much.
Can you look up the terms for your investment account?
The point is that the first month of the salary will be get the full amount of interest in the 4 years. The second month of the salary will get the full amount of the interest minus one month interest and so on. So the last month of the salary at the end of the 4 years will get only one month interest which is 300.
Your calculation is correct.
Thank you so much for your help.
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