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AER calculation
stebiz
Posts: 6,592 Forumite
Can anybody show me how I can find the AER please?
Invest 150,000 for 4 years
3.5% for year 1
2.0% for each of the other 3 years
AER over 4 years.
Cheers
Invest 150,000 for 4 years
3.5% for year 1
2.0% for each of the other 3 years
AER over 4 years.
Cheers
Ask me no questions, and I'll tell you no lies
0
Comments
-
My thoughts:-
(150000 x 1.03) x 1.02^3= 164752.54
150000 x (1+x)^4= 164752.54
x = ((164752.54/150000)^(1/4))-1
x=2.374%0 -
It seems a poor deal. 150000 with an annual interest rate of 2.374% will get to 164759.30 over four years, given the interest rate schedule. This is without any tax consideration.
J_B.0 -
MickHG although you quoted the right answer, your 1.03 should read 1.035.0
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