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

• Neurons

Posts: 537
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.
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
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
In the example's answers, they listed 660. My pain problem is not knowing how they got it.
• commoncoll

Posts: 1222
TheKrisPandemic saidIn the example's answers, they listed 660. My pain problem is not knowing how they got it.

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.