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Old 09-24-2017, 10:18 PM
marcelo marcelo is offline
Junior Member
Join Date: Sep 2017
Posts: 2
Default Problems converting a rate


I need to prove changing the composition of the rates, the total payments are the same.


- Investment: 1000
- Anual Rate: 15.34%
- Number Payments: 3

EACH PAYMENT (PMT): $ 440,45
TOTAL PAYMENTS: $440,45 x 3 = $1321.35


- Investment: 1000
- Monthly Rate: [( 1 + annual_Rate)^(1/12)]-1 = 1.2%
- Number payments: 36

TOTAL PAYMENTS: $ 34.35 x 36 = $1236.64

I don't know why when I sum all the payments give me different ressults (1321.35 annual evaluation and 1236.64 in monthly evaluation).

¿Anyone know what is the correct way to convert the annual rate to montly rate?

Thanks in advance.

Best regards
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