Interest Formulas and their Application

Example 3.1 Page 29

In [1]:
#initialisation of variable
P=20000.0;#in rupees
n=10.0;#in years
i=18.0;#% per annum

#calculation
F=P*(1+i/100)**n;

#result
print "Maturity value after 18 years is  ", round(F,3)," Rupees.";
print " Ans in the book is not correct"

Maturity value after 18 years is :  104676.711  Rupees.
 Ans in the book is not correct

Example 3.2 Page 30

In [5]:
#initialisation of variable
F=100000.0;#in rupees
n=10.0;#in years
i=15.0;#% per annum

#calculation
P=F/((1.0+i/100.0)**n);

#result
print "The person has to invest  ", round(P,3)," Rupees.";
print " Ans in the book is not correct"

The person has to invest   24718.471  Rupees.
 Ans in the book is not correct

Example 3.3 Page 31

In [8]:
#initialisation of variable
A=10000.0;#in rupees
n=25.0;#in years
i=20.0;#% per annum

#calculation
F=A*(((1+i/100)**n-1)/(i/100));

#result
print "The future sum of the annual equal payment after 25 years is ",round(F,3)," Rupees.";

The future sum of the annual equal payment after 25 years is  4719810.832  Rupees.

Example 3.4 Page 32

In [12]:
#initialisation of variable
F=500000.0;#in rupees
n=15.0;#in years
i=18.0;#% per annum

#calculation
A=F*((i/100)/((1+i/100)**n-1));

#result
print "The annual equal ammount which must be deposited for 15 years is  ",round(A,3)," Rupees.";

The annual equal ammount which must be deposited for 15 years is   8201.391  Rupees.

Example 3.5 Page 33

In [13]:
#initiasation of variable
A=1000000.0;#in rupees
n=20.0;#in years
i=15.0;#% per annum

#calculation
P=A*(((1+i/100)**n-1)/((i/100)*(1+i/100)**n));

#result
print "The amount of reserve which must be setup now is : ",round(P,3)," Rupees";
print " Ans in the book is not correct"

The amount of reserve which must be setup now is :  6259331.474  Rupees
 Ans in the book is not correct

Example 3.6 Page 34

In [14]:
#initialisation of variable
P=1000000.0;#in rupees
n=15.0;#in years
i=18.0;#% per annum

#calculation
A=P*(((i/100)*(1+i/100)**n)/((1+i/100)**n-1));

#result
print "The annual equivalent installment to be paid by the company to the bank is ",round(A)," Rupees.";

The annual equivalent installment to be paid by the company to the bank is :  196403.0  Rupees.

Example 3.7 Page 35

In [15]:
#initiation of variable
A1=4000.0;#in rupees
G=500.0;#in rupees
n=10.0;#in years
i=15.0;#% per annum

#calculation
A=A1+G*(((1+i/100)**n-(i/100)*n-1)/((i/100)*(1+i/100)**n-(i/100)));
F=A*(((1+i/100)**n-1)/(i/100));

#result
print "At the end of 10th year, the compound amountr of all his payments will be : ",round(F,3)," Rupees.";

At the end of 10th year, the compound amountr of all his payments will be :  115560.6  Rupees.

Example 3.8 Page 36

In [17]:
#initiation of variable
A1=8500.0;#in rupees
G=-500.0;#in rupees
n=10.0;#in years
i=15.0;#% per annum

#calculation
A=A1+G*(((1+i/100)**n-(i/100)*n-1)/((i/100)*(1+i/100)**n-(i/100)));
F=A*(((1+i/100)**n-1)/(i/100));

#result
print "At the end of 10th year, the compound amountr of all his payments will be : ",round(F,3)," Rupees.";

At the end of 10th year, the compound amountr of all his payments will be :  138235.878  Rupees.

Example 3.9 Page 38

In [18]:
#initiation of variable
P=5000.0;#in rupees
n=10.0;#in years
i=12.0;#% per annum
m=4.0;#no. of interest periods per year for quarterly

#calculation
N=n*m;
r=i/m;
F=P*(1+r/100)**N;

#result
print"Maturity value after 10 years is  ",round(F,3)," Rupees.";

Maturity value after 10 years is :  16310.189  Rupees.