Home For AAT student members AQ 2013 AAT Level 4 (Level 8 in Scotland)

Level 4 credit control - compound annual cost - Help please!

I am struggling with the calculation for compound annual cost. The example i have in my workbook is as follows -

(1+ 3/100-3) ^ (365/60-30) - 1 ) x 100 = 44.86%

The part im really struggling with is the "to the power of"

I havent had to use this since school which is a very long time ago so not sure exactly how I use this on the calculator.

Any help and advice would be great.

Comments

  • Mike WebsterMike Webster Just Joined Cardiff and ValeRegistered, Tutor Posts: 200
    Work out the two part of the equation first:

    (3/100-3)+1 = 1.03092784
    and
    (365/60-30) = 12.1666667

    The enter your answer from the first, press the 'to the power' button then enter the answer to the second part.

    1.03092784 to the power of 12.1666667 = 1.4485848

    Subtract 1 = 1.4485848 - 1 = 0.4485848

    then multiply by 100 = 44.85848% (rounded up to 44.86%)

    Does that help?
    Michael JH Webster AATQB FMAAT
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