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    shallom01's Avatar
    shallom01 Posts: 1, Reputation: 1
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    #1

    Sep 25, 2007, 11:00 AM
    interest rate
    how do u find the interest rate when you have a fv 502.84, pv 250 and number of years 5. When the equation fv=pv(1+k)^n, where k is the interest
    ake_finance's Avatar
    ake_finance Posts: 19, Reputation: 1
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    #2

    Oct 1, 2007, 08:07 PM
    FV = PV(1+K)^n
    I will take ln or natural log in both sides of the equation
    ln(FV) = ln(PV) + ln(1+K)^n
    ln(FV) = ln(PV) + n*ln(1+K)
    then I move n from the left hand side to the right hand side
    (ln(FV)-ln(PV))/n = ln(1+K)

    If you have calculator, you can find the value of (ln(FV)-ln(PV))/n, I will suppose that this term is X,next

    X = ln(1+K)
    I take e (exponential) to eliminate the ln, I will get
    e^X = 1+K
    (e^X) - 1 = K

    Therefore, I get tha answer that K = (e^X) - 1
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