SOLUTION: hi there, here is my question £883.61 = £1040/(1 + i2)2. Solving for i2 we get 8.489 per cent as the two-period spot rate how do I solve for i2?, can you please show me all t

Algebra ->  Finance -> SOLUTION: hi there, here is my question £883.61 = £1040/(1 + i2)2. Solving for i2 we get 8.489 per cent as the two-period spot rate how do I solve for i2?, can you please show me all t      Log On


   

Question 957790: hi there, here is my question
£883.61 = £1040/(1 + i2)2. Solving for i2 we get 8.489 per cent as the two-period spot rate
how do I solve for i2?, can you please show me all the steps?
thank you!!!
Tony
Answer by Fombitz(32388) About Me  (Show Source):
You can put this solution on YOUR website!
883.61=1040%2F%281%2Bi%5E2%29%5E2
I'm assuming the 2 is an exponent in each case in the denominator.
883.61%281%2Bi%5E2%29%5E2=1040
%281%2Bi%5E2%29%5E2=1040%2F883.61
1%2Bi%5E2=sqrt%281040%2F883.61%29
i%5E2=sqrt%281040%2F883.61%29-1