Want to win a PS4? Go Premium and enter to win our High-Tech Treats giveaway. Enter to Win

x
Solved

# Saving Calculation Question

Posted on 2016-08-11
Medium Priority
46 Views
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
Question by:kwarden13
[X]
###### 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
• 3

LVL 27

Assisted Solution

d-glitch earned 500 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

Alexandre Michel earned 1000 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

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

aburr earned 500 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

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

## Featured Post

Question has a verified solution.

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

Access developers frequently have requirements to interact with Excel (import from or output to) in their applications.  You might be able to accomplish this with the TransferSpreadsheet and OutputTo methods, but in this series of articles I will di…
After seeing numerous questions for Dynamic Data Validation I notice that most have used Visual Basic to solve the problem. This suggestion is purely formula based and can be used in multiple rows.
This Micro Tutorial demonstrate the bugs in Microsoft Excel for Mac with Pivot Charts.
Although Jacob Bernoulli (1654-1705) has been credited as the creator of "Binomial Distribution Table", Gottfried Leibniz (1646-1716) did his dissertation on the subject in 1666; Leibniz you may recall is the co-inventor of "Calculus" and beat Isaac…
###### Suggested Courses
Course of the Month9 days, 3 hours left to enroll