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Financial maths question

  • 25-01-2014 12:50pm
    #1
    FiachDubh
    Closed Accounts Posts: 72 ✭✭


    Ok so yeah, if someone could give me a hand and explain the answer to this question, It'd be much appreciated:

    Mary contributes €400 at the end of each month to a pension fund.
    The AER for the fund is 4.6%. she pans to retire in 20 years time.
    Find the rate of interest per month which is equivalent to the AER of 4.6%, when the monthly interest is compounded

    The answer is hardly (.046)^ 1/12?

    Thanks :D


Comments

  • #2
    Ciaran
    Registered Users, Registered Users 2 Posts: 971 ✭✭✭Ciaran


    FiachDubh wrote: »
    Ok so yeah, if someone could give me a hand and explain the answer to this question, It'd be much appreciated:

    Mary contributes €400 at the end of each month to a pension fund.
    The AER for the fund is 4.6%. she pans to retire in 20 years time.
    Find the rate of interest per month which is equivalent to the AER of 4.6%, when the monthly interest is compounded

    The answer is hardly (.046)^ 1/12?

    Thanks :D
    Nearly.

    1.046^(1/12) - 1.


  • #3
    FiachDubh
    Closed Accounts Posts: 72 ✭✭FiachDubh


    Thank you :)


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