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johnroba2 · Jan 31, 2012, 07:26 AM

I need to rearrange the formula shown below

M = P*(1 IR)to the power N

I need it expressed in terms of IR

Thank you for your help

John Roberts

ebaines · Jan 31, 2012, 07:33 AM

I assume you mean this:

$ M=P(1+IR)^N $

You can divide through by P:

$ \frac M P = (1 + IR)^N $

Then take the nth root of both sides:

$ (\frac M P )^{(1/N)} = 1 + IR $

Then subtract 1 from both sides:

$ (\frac M P )^{(1/N)} -1 = IR $

johnroba2 · Jan 31, 2012, 08:40 AM

Wow!Thanks very much for your help.

However Ive realised that the orinal equation was wrong

It should have been

M = P*(1+IR)+ (P*(1+IR))to the power N

to be expressed in terms of IR

Thanks again for your help

ebaines · Jan 31, 2012, 08:54 AM

$ M = P(1+IR) + (P(1+IR))^n $

If you replace P(1+IR) with a, you have:

$ M = a + a^n $

Unfortunately there is no closed form solution to express a in terms of M and n. If n = 2 you can use the quadratic equation to solve for a. But other than that case - you're limited to using numerical techniques to estimate a. Once you have that estimate then IR=(a/P)-1