Dear Dr. Hansz,
I am having a problem on one of the study questions at the end of chapter 14. The study question is number 10. Your answer that you have provided is $1,184.72 the answer I am coming up with is $380.67. I input the following information into my calculator:
PV = $135,000 N = 360 (12 x 30) I = 0.0083 (0.10 / 12) FV = 0. Could you please help me understand what I am doing wrong, I would greatly appreciate it.
Thank You,
Shannon
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Shannon,
I don't have the problem in front of me but I think I might see the problem in your answer below. Your calculator needs the interest rate (I) as a percentage (10%/12). Your answer indicates that you entered the interest rate a decimal (.10/12). Just enter I as 10/12.
Could you please try this and get back to me so I know that this was in fact the issue? Thank you, Dr. Hansz
Dr. Hansz, I tried what you suggested and it did work, thank you. But, I have one question about that, why would you leave the 10% as a whole number when dividing by 12 instead of changing the 10% into the decimal form first. Shannon |
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It is just the TI and HP calculator convention. It might even show I% on your calculator key. Basically, the calculator is automatically changing it to a decimal format for you.
May I post this question the class blog? I have a feeling someone else might have a similar issue. Now is the time to figure these things out!
Cheers,
Dr. Hansz
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