how to know if my answer is correct?

[logistic_guy]

here the question

Brad has nothing in his saving account right now, but realizes it would be a very good idea to build up a savings balance. His account pays $\displaystyle 4\%$ interest. How much should he deposit each month if he wants to have $\displaystyle \$10,000$ in this account in $\displaystyle 2$ years?

here my answer

$\displaystyle 4,901.96$

i'll share my answer with latex later

 

[lev888]

here the question

Brad has nothing in his saving account right now, but realizes it would be a very good idea to build up a savings balance. His account pays $\displaystyle 4\%$ interest. How much should he deposit each month if he wants to have $\displaystyle \$10,000$ in this account in $\displaystyle 2$ years?

here my answer

$\displaystyle 4,901.96$

i'll share my answer with latex later

To solve the problem, I am assuming, you used the appropriate investment balance formula to construct an equation, and then solved it. To verify your answer plug it into that formula.

 

[Otis]

His account pays 4% interest.

Hello. We need to know how the interest rate is applied. Is it simple interest? Is it compounded interest? If the interest compounds, then we need the compounding period (eg: daily, monthly, weekly, bi-monthly, semi-monthly, quarterly, annually, continuously).

How much should he deposit each month if he wants to have $10,000 … in 2 years? … my answer 4901.96.

Two years is 24 months.

24 × 4901.96 = 117647.04

In other words, after two years Brad will have deposited $117,647.04 into his account. Your answer is too large.

Did you use a formula containing 'present value' and 'future value' amounts?

---

In many of your posts, there is no way for us to know what you're doing or thinking. Are you able to start sharing your work and thoughts consistently, when starting threads asking for our help?

 

[logistic_guy]

To solve the problem, I am assuming, you used the appropriate investment balance formula to construct an equation, and then solved it. To verify your answer plug it into that formula.

i'll show you what i did

Hello. We need to know how the interest rate is applied. Is it simple interest? Is it compounded interest? If the interest compounds, then we need the compounding period (eg: daily, monthly, weekly, bi-monthly, semi-monthly, quarterly, annually, continuously).

this is my main concern. when i solved i assume it's annually. i won't blame the auther and say his question is ambigous because i'm sure somewhere in the text of his book he told the students to assume the rate annual if the problem not say anything about it. it happened to me before.

Library Guides: Math help from the Learning Centre: Ordinary Simple Annuities

This guide provides useful resources for a wide variety of math topics. It is targeted at students enrolled in a math course or any other Centennial course that requires math knowledge and skills.

libraryguides.centennialcollege.ca

that's a good website to explain the formula i'm using. go there under

Calculating the Payment of a Simple Ordinary Annuity​

$\displaystyle R = \text{future value} \times \frac{i}{(1 + i)^n - 1}$

$\displaystyle R = 10000 \times \frac{0.04}{(1 + 0.04)^2 - 1} = 4901.96$

i'm just wondering if my assumption make sense and that the best i can do to solve the question. there is no answer for even questions at the end of the book. only for odds. i can't see if my solution is correct or not.

 

[lev888]

i'll show you what i did


this is my main concern. when i solved i assume it's annually. i won't blame the auther and say his question is ambigous because i'm sure somewhere in the text of his book he told the students to assume the rate annual if the problem not say anything about it. it happened to me before.

Library Guides: Math help from the Learning Centre: Ordinary Simple Annuities

This guide provides useful resources for a wide variety of math topics. It is targeted at students enrolled in a math course or any other Centennial course that requires math knowledge and skills.

libraryguides.centennialcollege.ca

that's a good website to explain the formula i'm using. go there under

Calculating the Payment of a Simple Ordinary Annuity​

$\displaystyle R = \text{future value} \times \frac{i}{(1 + i)^n - 1}$

$\displaystyle R = 10000 \times \frac{0.04}{(1 + 0.04)^2 - 1} = 4901.96$

i'm just wondering if my assumption make sense and that the best i can do to solve the question. there is no answer for even questions at the end of the book. only for odds. i can't see if my solution is correct or not.

Did you review the example below the formula? As pointed out in a previous post, your answer is not correct.

 

[Dr.Peterson]

Library Guides: Math help from the Learning Centre: Ordinary Simple Annuities

This guide provides useful resources for a wide variety of math topics. It is targeted at students enrolled in a math course or any other Centennial course that requires math knowledge and skills.

libraryguides.centennialcollege.ca

that's a good website to explain the formula i'm using. go there under

Calculating the Payment of a Simple Ordinary Annuity​

$\displaystyle R = \text{future value} \times \frac{i}{(1 + i)^n - 1}$

$\displaystyle R = 10000 \times \frac{0.04}{(1 + 0.04)^2 - 1} = 4901.96$

i'm just wondering if my assumption make sense and that the best i can do to solve the question. there is no answer for even questions at the end of the book. only for odds. i can't see if my solution is correct or not.

Pay attention to the definitions of the variables, particularly n and i. Keep in mind that you have 24 monthly payments, not 2 annual payments, as has been pointed out.

 

[logistic_guy]

Did you review the example below the formula? As pointed out in a previous post, your answer is not correct.

yes i did. thank you lev888 for telling me this. now i can rethink to solve it differently

Pay attention to the definitions of the variables, particularly n and i. Keep in mind that you have 24 monthly payments, not 2 annual payments, as has been pointed out.

thank you Dr.Peterson. this give me a new idea


$\displaystyle R = 10000 \times \frac{0.04/12}{(1 + 0.04/12)^{24} - 1} = 400.92$

what about now? do the solution get any better?

 

[Otis]

i'm sure somewhere in the text of his book he told the students to assume the rate annual if the problem not say anything about it

I don't understand this statement. Do you read the textbook? (I'm beginning to wonder whether you're using that book simply as a source for random math exercises.)

 

[Dr.Peterson]

i'm sure somewhere in the text of his book he told the students to assume the rate annual if the problem not say anything about it.

I don't understand this statement. Do you read the textbook? (I'm beginning to wonder whether you're using that book simply as a source for random math exercises.)

I think it's common in some contexts to say, "Unless otherwise stated, interest rates given here can be assumed to be annual rates."

 

[Otis]

I think it's common in some contexts to say, "Unless otherwise stated, interest rates given here can be assumed to be annual rates."

Of course. Maybe guy and I are talking apples and oranges. He quoted my question about the compounding period and then replied with a statement of surety that the rate is supposed to be assumed annual from "somewhere" in the textbook. I thought he was answering my question.

 

[logistic_guy]

I don't understand this statement. Do you read the textbook? (I'm beginning to wonder whether you're using that book simply as a source for random math exercises.)

i myself don't understand my statements
i read but not in detail. it's an elective course i'm stuying now

yes i did. thank you lev888 for telling me this. now i can rethink to solve it differently



thank you Dr.Peterson. this give me a new idea


$\displaystyle R = 10000 \times \frac{0.04/12}{(1 + 0.04/12)^{24} - 1} = 400.92$

what about now? do the solution get any better?

lev888 and Dr.Peterson still didn't tell me if i get correct answer this time

 

[lev888]

i myself don't understand my statements
i read but not in detail. it's an elective course i'm stuying now


lev888 and Dr.Peterson still didn't tell me if i get correct answer this time

It looks good. An AI I asked provided a slightly different result, I'm guessing because of rounding.

 

[mmm4444bot]

lev888 and Dr.Peterson still didn't tell me if i get correct answer this time

Please be patient, while waiting for responses to your posts. Volunteers post as their personal schedules and interests allow.

i read but not in detail

That leads to issues, when learning mathematics. You may want to reconsider your approach to learning.

Please read the forum's posting guidelines in detail. You will find details like the following.

Have patience. There is no paid staff waiting on-hand to give instant replies. Many of the volunteer tutors have "real" jobs, and they all have to sleep from time to time.

 

[Dr.Peterson]

lev888 and Dr.Peterson still didn't tell me if i get correct answer this time

I took @lev888's "like" as a confirmation, agreeing with my assessment. I got what you got, 400.915888... , using the formula, which I think is right. I also got the same answer from a spreadsheet (assuming I used the right functions), and checked the answer in the spreadsheet.

But I don't consider myself a finance expert, so I generally leave confirmation to those who are (or imagine they know enough). there are all sorts of things I could miss.

 

[BigBeachBanana]