Welcome to Experts Exchange

Add your voice to the tech community where 5M+ people, just like you, are talking about what matters.

  • Help others & share knowledge
  • Earn cash & points
  • Learn & ask questions
Solved

Saving Calculation Question

Posted on 2016-08-11
5
39 Views
Last Modified: 2016-08-30
I inherited a report with the following formula for savings.

=(a2)/(1-6.8%)-a2  where 6.8% is the savings rate

When I calculate savings I was doing a2*6.8%. Anyone know what they were trying to accomplish? You get slightly different numbers.
0
Comment
Question by:kwarden13
  • 3
5 Comments
 
LVL 27

Assisted Solution

by:d-glitch
d-glitch earned 125 total points (awarded by participants)
ID: 41752315
If a2 is the amount you have now
(a2)/(1-6.8%) is the amount you had a year ago
and (a2)/(1-6.8%)-a2 is the amount of interest you received last year.

This assumes no monthly compounding and is probably not the right way to do the calculation.
0
 
LVL 4

Accepted Solution

by:
Alexandre Michel earned 250 total points (awarded by participants)
ID: 41752321
Your formula  is used to calculate the discount on the original price
The formula above uses the discounted price and calculated what the discount was

e.g.
Original price = $100, discount = 100 * 0.068 = $6.80.
Then Discounted price is $100-$6.80= $93.20

Formula above starts with the discounted price

( 93.20 / (1-0.068) ) - 93.20 = ( 93.20 / 0.930 ) - 93.20 = 100 - 93.20 = 6.80
 
Hope this helped
0
 
LVL 27

Expert Comment

by:d-glitch
ID: 41752323
>>  and (a2)/(1-6.8%)-a2 is the amount of interest you received last year.

That should be paid out not  received  since it will be negative.
0
 
LVL 27

Assisted Solution

by:aburr
aburr earned 125 total points (awarded by participants)
ID: 41752715
both equations are exactly the same.
Put them equal to each other and simplify
0
 
LVL 27

Expert Comment

by:d-glitch
ID: 41776030
I was invited to help close this.  I believe it is resolved.
0

Featured Post

Networking for the Cloud Era

Join Microsoft and Riverbed for a discussion and demonstration of enhancements to SteelConnect:
-One-click orchestration and cloud connectivity in Azure environments
-Tight integration of SD-WAN and WAN optimization capabilities
-Scalability and resiliency equal to a data center

Question has a verified solution.

If you are experiencing a similar issue, please ask a related question

Lithium-ion batteries area cornerstone of today's portable electronic devices, and even though they are relied upon heavily, their chemistry and origin are not of common knowledge. This article is about a device on which every smartphone, laptop, an…
This code takes an Excel list of URL’s and adds a header titled “URL List”. It then searches through all URL’s in column “A”, looking for duplicates. When a duplicate is found, it is moved to the top of the list. The duplicate URL’s are then highlig…
The viewer will learn how to create a normally distributed random variable in Excel, use a normal distribution to simulate the return on an investment over a period of years, Create a Monte Carlo simulation using a normal random variable, and calcul…
This Micro Tutorial will demonstrate how to use longer labels with horizontal bar charts instead of the vertical column chart.

839 members asked questions and received personalized solutions in the past 7 days.

Join the community of 500,000 technology professionals and ask your questions.

Join & Ask a Question