Urgent help please... (1 Viewer)

[*Ninny-mole*]

Okay, can someone please explain to me, in REALLY simple terms, both Superannuation and Loan Repayments.
Compound Interest is easy enough isn't it? Like the only real things you have to worry about are changing the time periods, and the rate of interest to suit those time periods. But, I am having real trouble working out the Super payments and Loan repayments. Please help me....

 

[rweather]

basic explanation is for loan repayments is remeber the formula and if they ask you to identify a geometric series you just have to derive it.
the formula is PR^n-M(1-R^n)(devided by) (R-1)
where P is the intially loan amount
R is the rate of interest, note: ( add one to the interest rate, for exmple if the rate was 11%p.a. whicj is 0.11 add 1 so R is 1.11)
n time or the amount of times repayment and interest occurs.
M is the repayment
if you need help deriving the formula tell me and i will explain.

I tend to get stuck on super but i'ii explain to the best i can.
the formula is PR^n + M(1-R^n) (devided by) (R-1)
where P is original investment
R is the interest rate
n time
M is the futher contributions (payments)
if you need help deriveing this if they ask to identify the geometric series just ask me, i hope this is clearer for you, i tried to explain this to my best ability.


Rob

 

[SoulSearcher]

To clear up the typing work,
Loan repayment formula is:
A_n = PRⁿ - M(Rⁿ-1)/(R-1), using the same symbols as above.

Superannuation payment formula is:
S_n = a(rⁿ-1)/(r-1),
where a is the regular super payment,
r is the interest rate + 1
n is the number of time periods the super is paid for.

 

[*Ninny-mole*]

Thanks heaps. My test is tommorrow so if I can't work that, then I will never get it, but you have just helped me try and pass this exam. Thanks heaps, Kate