FNPF-Help

angi13

Hi,

Can anybody help me with question 1.5 c) CAB 4, i do not understand how to calculate the equivalent to annual compound interest rate?

Thank you very much.
Angi

Nps

Hi,

Have a look at this thread. The answer you need starts on on page 5, towards the bottom (look for my 2nd post on that page), and carries on to page 6.

http://forums.aat.org.uk/showthread.php?36041-Financial-performance-round-2!/page5

angi13

Hi,

Thank you so much.

welshwizard

Hi there

I found these quite interesting threads and some tutors are also asking the same thing.

One tutor made a very good point, you are given options so can quite quickly use each one to see which % gives the end result. Using the index figures 100 ==> 180:

Index + %

so:

Year Index % Compound interest (£)
1 100.00 10.29% 10.29
2 110.29 10.29% 11.35
3 121.64 10.29% 12.52
4 134.16 10.29% 13.80
5 147.96 10.29% 15.23
6 163.19 10.29% 16.79
7 179.98 10.29% 18.52

Hope this helps

angi13

Hi Welshwizard,

Thank you very much.