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CALCULATING THE INTEREST FROM THE PENSION FORMULA
For example, at the end of each year, a single individual must contribute $500 to 10 pensions. Um do you know the reply? I cus have come to one and I don't know if what I've done is right ? this is what I've devised:
They cannot, however, be obliged to do so in the examination in a mathematical way. You can only use the annuity table "backwards" in the check. The 10-year annuity discounting coefficient must therefore be 3500/500 = 7, see the annuity table. You will see that 7% leads to a discounting of 7.024 and 8% leads to a discounting of 6.710. no straight line equation... must be simulated. but I can easily find the interest rates with every annuity case... please try this one.
$3500= 500 [ 1- 1/(1+r)^10 /r All i did here was be reading from this adverse exponent by reciprocity. how to compute annuity at 3.5% bankroate. An annuity factor calculation equation is included at the top of the annuity table you will receive in the examination (and a copy can be found in our free course materials).
However, it is very uncommon for the audit to require a rebate at an interest that is not listed in the table. In the case of repayable bonds, it would only be of relevance if you were asked to determine the value of the bonds, and the yield demanded by creditors was 3.5%.
Frequently in the audit with repayable debts, you will be given the fair value and asked to charge the costs of the debts. Here (as I explained in the free lectures) the IRR is calculated by making two "estimates" as normal, and one would not select a 3.5% as one of the estimates.
Hello Plen, I´m tries to compute the interest on a pension, knows the PV, the pension and the number of cycles and I´m struggles with the equation. It may be impossible to use the "backwards" formulation in the Paper F9 test, so you are really squandering your cum.
And the best you can be asked for (and that's not so likely) is to use the pension insurance charts backwards. The annuity coefficient (PV split by full year flow) can be calculated. So, look at the 10-year series, find the next number to the pension coefficient and see what the interest is at the top of the bar!