FNPF-Help

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angi13
angi13 Registered Posts: 24 New contributor 🐸
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

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  • Nps
    Nps Registered Posts: 782
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    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
    angi13 Registered Posts: 24 New contributor 🐸
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    Hi,

    Thank you so much.
  • welshwizard
    welshwizard Registered Posts: 465 Dedicated contributor 🦉
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    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
    angi13 Registered Posts: 24 New contributor 🐸
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    Hi Welshwizard,

    Thank you very much.
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