Discrete Annual Compound Interest Use SOLVER when F(x) = y, or F(x1, x2, x3, etc) = y.

want y at a certain value, or

Interest Rate want y at a maximum or minimum,
10.00% given certain constraints on values of x.

Year Cash Balance

0 $1,000.00
1 $1,100.00
2 $1,210.00
3 $1,331.00
4 $1,464.10
5 $1,610.51
6 $1,771.56
7 $1,948.72
8 $2,143.59
9 $2,357.95
10 $2,593.74

use Solver to calculate

(1) What discrete annual interest rate, at an initial balance of $1,000, results in $5,000 after 10 yea

(2) What initial balance, at an interest rate of 10%, results in $5,000 after 10 years?

(3) Challenge problem

Suppose you wanted to know: after how many years will $1000 at 7% be worth $5,000?
Hint: this requires re-structuring the formula so that the changing number of years is located in on
 F(x1, x2, x3, etc) = y.

sults in $5,000 after 10 years?

er 10 years?

e worth $5,000?
ber of years is located in one cell location
Discrete Annual Compound Interest Use Solver when you have a function F(x) =
and you want to find x so that
Interest Rate y has a target value, or is at a maximum or
17.46%
you can also place contraints on range of x
Year Cash Balance you can also solve when the function is on
0 $1,000.00 more than one variable: F(x1, x2) = y.
1 $1,174.62
2 $1,379.73 use Solver to calculate
3 $1,620.66
4 $1,903.65 (1) What discrete annual interest rate, at an
5 $2,236.07 results in $5,000 after 10 years?
6 $2,626.53 (2) What initial balance, at an interest rate
7 $3,085.17 results in $5,000 after 10 years?
8 $3,623.90 (3) Challenge problem
9 $4,256.70 Suppose you wanted to know: after how m
10 $5,000.00 will $1000 at 7% be worth $5,000?
Hint: this requires re-structuring the formu
so that the changing number of years is loc
See solution next sheet
have a function F(x) = y
x so that
r is at a maximum or minimum.

ntraints on range of x
en the function is on
le: F(x1, x2) = y.

ual interest rate, at an initial balance of $1,000,

r 10 years? 17.46%
e, at an interest rate of 10%,
10 years? Answer: $1,927.72

to know: after how many years

orth $5,000?
structuring the formula
number of years is located in one cell location
Discrete Annual Compound Interest

Interest Rate
7.00%

Year Cash Balance

0 $1,000.00
1 $1,070.00
2 $1,144.90
3 $1,225.04
4 $1,310.80
5 $1,402.55
6 $1,500.73
7 $1,605.78
8 $1,718.19
9 $1,838.46
10 $1,967.15

After how many years will $1000 at 7% be worth $5,000?

number of years 10

restated formula
Discrete Annual Compound Interest

Interest Rate
7.00%

Year Cash Balance After how many years will $1000 at 7% be

0 $1,000.00
1 $1,070.00 number of years 23.78761
2 $1,144.90
3 $1,225.04 restated formula
4 $1,310.80
5 $1,402.55 $5,000.00 (1+C4)^$G$8
6 $1,500.73
7 $1,605.78
8 $1,718.19
9 $1,838.46
10 $1,967.15
will $1000 at 7% be worth $5,000?

1+C4)^$G$8