12c Solving for n

[Zac Bruce]

Deiter,

Thankyou very much for that very thorough and detailed reply.
I feel I have a much better understanding of the topic now.

I can see my flaw in logic with regards to the problem of e.g. n=8 or n=9, thinking that there would indeed be some period in between where the e.g. bank/investment would pay an amount of interest closer to the desired value, but of course this is not the case.

So I can now see that in my original calculation it is more applicable to the real world to then recalculate FV for n=9, and see what the amount will be, or recalculate for n=8 and make an informed decision whether you are happy to be $9.30 short of your goal of $2500, or wait the extra period and have an extra $214.87

With the first question, where PMT is involved, it is still important to be able to calculate the final fractional payment. As in when you have loaned an amount of money, it may take 328 payments (n) to fully pay the loan, but it is important to know that the final payment will indeed be a fractional payment (not a fraction of time). Is there anything wrong with the solution given by HP for calculating that final, fractional payment? (i.e. recalculate FV, RCL PMT +) I now understand that taking that final fractional payment and trying to relate it to a fractional period of time is the wrong (or not practical) way to be thinking about it, but I want to be sure that the calculation of the fractional payment is correct. In place of my original approximate solution (n=327.44), it would instead be interpreted as "327 full payments of $325, plus a final payment of $143.11" and not in terms of time.

The site that Paul suggested included a program to solve for a mathematically correct value of n, which is slightly different to your suggestion (allows for END or BEGIN by storing 1 in either STO 1 or STO 2) but comes up with the same results.

Quote: ...There is a simple solution

I guess if I do the work to internalize and memorize the equation, then yes, very simple! I'm perhaps too blessed to have constant access to electronics and the internet to do the "hard" work for me!

I bought a copy of Gene Wright's book, I think I might go and get it printed and bound tomorrow, start reading and try actually understand the maths, rather than just understanding which buttons to press!


Regards,

Zac