Does ANYONE know a thing or two about Financial Math? I'm going insane because of this question!

  • Neurons

    Posts: 537

    Jul 16, 2011 2:15 AM GMT
    Don't know if anyone will be able to help me with this. I'm doubting anyone will but I'm trying anyway. This problem has been bugging the crap out of me. I know how to figure it out on paper but I'm trying to do it on my financial calculator and I just don't get where a number came from on the example for the question.

    The Question:

    What is the size of a scholarship that can be paid at the end of every six months from a fund of $33,000 if interest is 5.75% compounded quarterly?

    The Facts:

    I know how to solve this on paper, but solving it on the calculator is a bit different. There are 6 things I need to know.

    N = 660
    I/Y = 5.75%
    PV = -33,000
    FV = 0
    P/Y = 2
    C/Y = 4
    PMT = ?

    N is Periods per year multiplied by years.
    I/Y is Interest Rate per Year
    PV is Present Value
    FV is Future Value
    P/Y is Periods per Year
    C/Y is Compounding Periods per Year
    PMT is payment

    What I can't understand...

    Where the hell did 660 come from? There are NO years mentioned in the question so I don't understand how they could have gotten that number. The thing is, I'm working on another problem and I need to find N but I don't know how they could've gotten it. It's bugging me so much, if anyone's able to tell me anything about it I'd greatly appreciate it!
  • Posted by a hidden member.
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    Jul 16, 2011 2:19 AM GMT
    TheKrisPandemic saidDon't know if anyone will be able to help me with this. I'm doubting anyone will but I'm trying anyway. This problem has been bugging the crap out of me. I know how to figure it out on paper but I'm trying to do it on my financial calculator and I just don't get where a number came from on the example for the question.

    The Question:

    What is the size of a scholarship that can be paid at the end of every six months from a fund of $33,000 if interest is 5.75% compounded quarterly?

    The Facts:

    I know how to solve this on paper, but solving it on the calculator is a bit different. There are 6 things I need to know.

    N = 660
    I/Y = 5.75%
    PV = -33,000
    FV = 0
    P/Y = 2
    C/Y = 4

    N is Periods per year multiplied by years.
    I/Y is Interest Rate per Year
    PV is Present Value
    FV is Future Value
    P/Y is Periods per Year
    C/Y is Compounding Periods per Year

    What I can't understand...

    Where the hell did 660 come from? There are NO years mentioned in the question so I don't understand how they could have gotten that number. The thing is, I'm working on another problem and I need to find N but I don't know how they could've gotten it. It's bugging me so much, if anyone's able to tell me anything about it I'd greatly appreciate it!


    If your gonna live off of the interest, paid out every 6 months compounded quarterly, your N is going to be 2. Where N is the amount of quarters in 6 months. take 5.75%/4 (dont know the answer) and thats your interest. Hit payment you should be good.

    Its been a while since ive done financial math, but thats how I remember it.
  • Neurons

    Posts: 537

    Jul 16, 2011 2:26 AM GMT
    Chainers said
    TheKrisPandemic saidDon't know if anyone will be able to help me with this. I'm doubting anyone will but I'm trying anyway. This problem has been bugging the crap out of me. I know how to figure it out on paper but I'm trying to do it on my financial calculator and I just don't get where a number came from on the example for the question.

    The Question:

    What is the size of a scholarship that can be paid at the end of every six months from a fund of $33,000 if interest is 5.75% compounded quarterly?

    The Facts:

    I know how to solve this on paper, but solving it on the calculator is a bit different. There are 6 things I need to know.

    N = 660
    I/Y = 5.75%
    PV = -33,000
    FV = 0
    P/Y = 2
    C/Y = 4

    N is Periods per year multiplied by years.
    I/Y is Interest Rate per Year
    PV is Present Value
    FV is Future Value
    P/Y is Periods per Year
    C/Y is Compounding Periods per Year

    What I can't understand...

    Where the hell did 660 come from? There are NO years mentioned in the question so I don't understand how they could have gotten that number. The thing is, I'm working on another problem and I need to find N but I don't know how they could've gotten it. It's bugging me so much, if anyone's able to tell me anything about it I'd greatly appreciate it!


    If your gonna live off of the interest, paid out every 6 months compounded quarterly, your N is going to be 2. Where N is the amount of quarters in 6 months. take 5.75%/4 (dont know the answer) and thats your interest. Hit payment you should be good.

    Its been a while since ive done financial math, but thats how I remember it.


    That didn't work, FFS. I appreciate it, Chainers! Thanks for the help!
  • Neurons

    Posts: 537

    Jul 16, 2011 2:33 AM GMT
    In the example's answers, they listed 660. My pain problem is not knowing how they got it. icon_sad.gif
  • commoncoll

    Posts: 1222

    Jul 16, 2011 6:10 AM GMT
    TheKrisPandemic saidIn the example's answers, they listed 660. My pain problem is not knowing how they got it. icon_sad.gif

    The only way they can get 660 is if they paid out the scholarship over 330 years. This is probably a typo in the example.
  • Posted by a hidden member.
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    Jul 16, 2011 6:30 AM GMT
    If you paid monthly for 55 years, then you get 660 payments.

    Although for a scholarship, that's crazy long.
  • Neurons

    Posts: 537

    Jul 16, 2011 10:59 AM GMT
    Thank you everyone! I was able to understand that it was 55 years. The problem is, the question doesn't mention 55 years so for A similar question, I can't figure out N.