Question

M=600,000[4%(1+0.04)^300] / [(1+0.04)^300-1] How does one compute this formula using a regular calculator?

This formula follows the Buy versus Rent Decision Case Study...Question 1.

Answer 1

To calculate 1.04³⁰⁰, use following steps:

1st calculate 1.04²⁵⁶

type 1.04 then press x² (square button 8 times) which will give you 1.04²⁵⁶ = 22936.907

since 2⁸ = 256

Then caculate 1.04³²

type 1.04 then press x² (square button 5 times) which will give you 1.04³² = 3.508

since 2⁵ = 32

Then caculate 1.04⁸

type 1.04 then press x² (square button 3 times) which will give you 1.04⁸ = 1.368

since 2³ = 8

Then caculate 1.04⁴

type 1.04 then press x² (square button 2 times) which will give you 1.04⁴ = 1.170

since 2² = 4

Multiply 1.04²⁵⁶ x 1.04³² x 1.04⁸ x 1.04⁴ = 1.04^(256+32+8+4) = 1.04³⁰⁰

1.04³⁰⁰ = 22936.91 x 3.51 x 1.37 x 1.17 = 128,825.49

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