Linear Inerpolation with TI BA II Plus Professional

[mewsik_man]

Would someone help me with linear interpolation on the TI BA II Plus Professional?

Example: Michael pays 2500 at time 0 in order to receive 400 at the end of each year for 7 years with the first payment at the end of the first year. He also receives a lump sum of 1000 at time 8 years. Find the annual effetive rate of interest that he earns on his money.

The equation: 2500 = 400 x [(1-(1+i)^-7)/i] + 1000 x (1+i)^-8

How do you solve the right side of the equation for i using linear interpolation on the BA II Plus Professional? A step by step direction would be most beneficial.

[S2000magician]

This isn’t a linear interpolation problem; it’s a straightforward time value of money (TVM) problem.

n = 8

PV = −2,500

PMT = 400

FV = 600

Solve for i = 9.1448%

Note that payment 8 received years from now is the sum of the $400 periodic payment and the $600 final payment: $1,000.

[philstinnet]

This is one of the simplest problem. You need to watch the following video to understand TI BA II Plus Professional -

​ https://www.youtube.com/watch?v=uQL8mZWjLPQ

Once you go through the video, the question will seem trifle.

Phil

@mewsik\_man

Would someone help me with linear interpolation on the TI BA II Plus Professional?

Example: Michael pays 2500 at time 0 in order to receive 400 at the end of each year for 7 years with the first payment at the end of the first year. He also receives a lump sum of 1000 at time 8 years. Find the annual effetive rate of interest that he earns on his money.

The equation: 2500 = 400 x [(1-(1+i)^-7)/i] + 1000 x (1+i)^-8

How do you solve the right side of the equation for i using linear interpolation on the BA II Plus Professional? A step by step direction would be most beneficial.