document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1178363>Question 1178363</A>: <I><SPAN STYLE=\"word-break: break-all;\"> The table of conversion from flat interest rate to reducing balance interest rate is based on the formula F= (1+R)^n (nR-1)+1/ n(1+R)^n-n, where F is the flat rate per month, R is the reducible rate per month and n is the number of monthly payments. To get the monthly rate, divide the annual rate by 12. Calculate the approximate flat interest rate for 8% per annum reducible for 3 years. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #807836 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=807836\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> F= (1+R)^n (nR-1)+1/ n(1+R)^n-n.<BR>\n" );
document.write( "F is the flat rate per month, R is the reducible rate per month and n is the number of monthly payments.\r<BR>\n" );
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document.write( "i don't know about that formula.<BR>\n" );
document.write( "i wasn't able to duplicate my answer with it.<BR>\n" );
document.write( "what i did do is the following:\r<BR>\n" );
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document.write( "i used a financial calculator to get the payment for reducing balance at 8% per month for 36 monhs, using a starting balance of 1000.\r<BR>\n" );
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document.write( "that monthly payment was 31.33636546.\r<BR>\n" );
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document.write( "multiply that by 36 months and the the sum of the payments was 1128.109157.\r<BR>\n" );
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document.write( "subtract 1 from that to get sum of all interest payments = 128.109157.\r<BR>\n" );
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document.write( "the flat rate formula is i = p * r * t<BR>\n" );
document.write( "i is the interest<BR>\n" );
document.write( "p is the principal <BR>\n" );
document.write( "r is the interest rate per time period<BR>\n" );
document.write( "t is the number of time periods.\r<BR>\n" );
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document.write( "with i = 128.109157 and p = 1000 and t = 36, the formula becomes:<BR>\n" );
document.write( "128.109157 = 1000 * r * 36<BR>\n" );
document.write( "solve for r to get:<BR>\n" );
document.write( "r = 128.109157 / (1000 * 36) = .003558588.<BR>\n" );
document.write( "multiply that by 12 to get .042703052.\r<BR>\n" );
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document.write( "that's = to 4.2703052%.\r<BR>\n" );
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document.write( "what this says is that a flat rate of 4.2703052% per year is equivalent to a reducing balance rate of 8% per year compounded monthly.\r<BR>\n" );
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document.write( "what this is comparing is the interest from the flat rate loan to the interest from the reducing balance loan.\r<BR>\n" );
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document.write( "they will both charge the same overall interest with those rates.\r<BR>\n" );
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document.write( "i found a calculator online that does a comparison and that calculator confirms that i did the calculations correctly.\\r<BR>\n" );
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document.write( "here's what the results from that calculator looked like.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2021/041301.jpg\">\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2021/041302.jpg\">\r<BR>\n" );
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document.write( "this is the best i can do.\r<BR>\n" );
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document.write( "i tried to use the formula but am not sure if i interpreted it correctly.\r<BR>\n" );
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document.write( "the method should work regardless of what the amount of the loan is.\r<BR>\n" );
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document.write( "the online reducing balance calculator i used is at <a  rel=nofollow HREF= \"https://arachnoid.com/finance/index.html\" target = \"_blank\">https://arachnoid.com/finance/index.html</a>\r<BR>\n" );
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document.write( "the results from use of that calculator are shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2021/041303.jpg\">\r<BR>\n" );
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document.write( "i used the ti-ba-ii which gave me the more detailed answer with more decimal places.\r<BR>\n" );
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document.write( "the flat rate versus reducing balance calculator can be found at <a  rel=nofollow HREF= \"https://emi-calc.com/flat-rate-vs-reducing-balance-rate-emi-calculation.php\" target = \"_blank\">https://emi-calc.com/flat-rate-vs-reducing-balance-rate-emi-calculation.php</a><BR>\n" );
document.write( " </SPAN>\n" );
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