Question
For the factor (F/P,10%,43), find the percent difference between interpolated and formula-calculated values, assuming the formula-calculated...
For the factor (F/P,10%,43), find the percent difference between interpolated and formula-calculated values, assuming the formula-calculated value is the correct one.
Homework Answers
Answer #1
Answer:
For the factor (F/P,10%,43),
The question is to find the percentage difference between the interpolate and formula calculated value of F/P single payment compound amount:
Given that,
F=P(F/P , i, n)
=P(F/P , 10% , 43)
Where,
F is the future amount
P is present value of salary
i is interest rate
n is number of terms that the money is for
Firstly, find the interpolated value from Table-15. We will get
the value of 
at 
and 
which is 45.2593 and 72.8905
respectively.
Now, calculate the
using the interpolation for 
Thus, the interpolated value of compounded amount at n=43 is 61.838052
Now, the next step is to find the formula calculated value of P(F/P, 10% ,43)
F=P(1+i)n
Thus, the formula-calculated value at n=43 is 60.24
As given in question, take formula calculated value correct and show the percentage difference between both the values.
% difference 
=2.64%
Thus, the percentage difference between the interpolate and formula calculated value is 2.64%.
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