FINANCIAL POLYNOMIALS

Financial Polynomials

Financial Polynomials

Solution to Question 90 (Pg # 304)

Let A =

Now solving the above equation we get,

A = P [(1)2 + 2 (1) (r / 2) + (r 2/ 2)]

A = P [1 + r + (r2 / 4)]

Now if P = $200 and r = 10% we get,

A = 200 [1 + 0.10 + (0.102/2)]

A = 200(1.1 + 0.005)

A = $220.1

Now if P = $5670 and r = 3.5%

A = 5670[1 + 0.035 + (0.0352/2)]

A = 5670(1.035 + 0.00061)

A = $5871.9228.

Discussion

Compound interest is the basic mathematical and financial tool which is used to find out the interest ...