Thursday, March 5, 2009


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Dear Friends:

Firstly, let's answer the questions posed in the last thrill-packed posting of BRAINTENANCE, wherein you were newly empowered with the interest and annuity tables made available above this posting section. Here they are:

1. What will my monthly mortage payment be on a loan of $300,000.00 for 20 years at 6%?
Using the LOAN AMORTIZATION CALCULATOR, the answer is $2,149.29.

2. How much money must I deposit each month into an account bearing interest at 7% per annum to accumulate the total sum (the "Future Value") of $25,000 at the end of 20 years?
Using the ANNUITY CALCULATOR, the answer is found in years, so that my answer would be $569.93 per year...however, since the question required that the answer be stated in months, I divided the annual amount $569.93 by 12, to come up with an answer of approximately $47.49 per month.

3. What sum must I invest today, at 8% interest per annum, in order to accumulate a future sum of $15,000 in 12 years?
Using the PRESENT VALUE CALCULATOR, the answer found is $5,956.71.

Today's exercise is a simple one which involves probability -- one of my personal favorites (and one of yours, too, I hope):

Q: If the probability of a student being nominated as a candidate for class president is 5%, and the probability of his or her actually winning the presidency is 12%, what is the probability of:

1. A student being nominated but not elected?

2. A student being neither nominated nor elected?

3. A student not being nominated, but being elected?


Douglas Castle

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