compounding interest

[search1ng]

Hey guys,

got a stupid water bill i forgot about. 11 days overdue and i need to pay the late fee which is, 'interest of 11% per annum, compounding daily'.

original fee was $635.22

I did the math and I think it comes to $637.33 but I was hoping someone could double check this for me.

Cheers.

 

[Mike32ct]

i = 0.11/365 = 0.00030136986

F=P(1+i)^n

F = (635.22)(1.00030136986)^11 = 637.33

Spot on buddy .

 

[search1ng]

Sweet! thought i was right but...been awhile since I touched this stuff. Who knew, high school mathematics actually helps! haha

 

[Mike32ct]

Sweet! thought i was right but...been awhile since I touched this stuff. Who knew, high school mathematics actually helps! haha

I wish I learned that in high school lol. I learned it in university. The course was Engineering Economics. We covered present value, future value, internal rate of return, and all that stuff. That was a very useful class.

When I bought my latest car, the finance lady looked at her computer screen and told me the payment amount. I wanted to confirm that her number was correct. I quickly derived the loan payment formula on paper using geometric series, and then I calculated the exact the payment amount in front of her. Her jaw dropped, and she asked me if I needed a job LOL.

 

[Down Low]

I got 637.22

windows calculator in scientific mode

1.11 y√x 365 = x^y 11 = * 635.22 = 637.22097308203186735681582737437