Math help

[AirWolf]

@xrapidx: No problem, glad to have helped.

@AirWolf: Fair point. With added brackets (and a bit of refining of the "interest pm" and "interest pa" parts - the values and result stays the same though) it comes to

Total: (Initial payment pm)*((interest pa+1)^(no. of payment increases over whole period))*(years in period)*((interest pa)/(interest pm)) =
(R 200)*((1.1)^(34))*(35)*((0.1)/(nroot(1.1;12)-1 [=0.0080]))

Ok, shot.

One final final question:
In this example both rates ie. interest rate and escalation on payment are both 10%, so it works fine. But isn't there supposed to be two different interests in the equation:
Eg Interest A = interest rate earned
Interest B = annual escalation percentage on monthly amount paid
for situations where both are not say 10% like in the example here?

 

[bemark]

well spotted. the first reference to "interest pa" would be the annual escalation percentage, so the refined equation would read

(initial payment pm)*((escalation % pa + 1)^(no. of payment increases over whole period))*(years in period)*((interest pa)/(interest pm))