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#1 2013-02-02 17:35:03

muxdemux
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Finding the Compound Interest Rate

Given a loan amount L, a term Y (in years) and a fixed monthly repayment P, I want to find (or at least approximate) the compound interest rate R. The loan is compounded monthly, once before each payment.

I've looked into geometric series, though it isn't too easy to solve for the ratio.

I'm using a computer to find the interest rate, so iterative methods are fine.

#2 2013-02-02 18:20:49

bobbym
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Re: Finding the Compound Interest Rate

Hi;

Nothing from here could help?

http://en.wikipedia.org/wiki/Compound_interest


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

#3 2013-02-02 19:22:25

muxdemux
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Re: Finding the Compound Interest Rate

Thanks for your help, bobbym. I think I misspoke; I wanted the interest rate of an amortized loan.

Anyway, I was able to find an approximation method here.

#4 2013-02-02 21:29:13

bobbym
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Re: Finding the Compound Interest Rate

Hi muxdemux;

I am glad found that. It is a nice page.


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

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