Artificial intelligent assistant

Transpose Present Value of an Ordinary Annuity Formula for Interest Rate I'm having trouble transposing the formula for Present Value of an Ordinary Annuity in order to find the interest rate. The formula is: ![enter image description here]( Where P=Present Value of an Ordinary Annuity PMT=Payment i=Interest Rate n=Number of Terms Not sure if it helps, but I managed to simplify the formula to this: ![enter image description here]( Thanks in advance.

It exists no closed-form expression for $i$ if $n>1$. Let $1+i=q$, your second equation becomes

$P=PMT\cdot \frac{q^n-1}{(q-1)\cdot q^n}$

Multiplying both sides by $(q-1)\cdot q^n$

$P\cdot (q-1)\cdot q^n=PMT\cdot (q^n-1)$

Multiplying out the brackets

$P\cdot q^{n+1}-P\cdot q^n=PMT\cdot q^n-PMT$

$P\cdot q^{n+1}-(P+PMT)\cdot q^n+PMT=0$

This is a polynomial with a degree of $n+1$. For $n=1$ it is a quadratic equation. It can be solved by using the quadratic formula. For $n=2$ the cardano formula can be maybe used. But for $n>2$ there exist no closed-form formula. In general you have to apply an approximation method, for instance the Newton-Raphson method.

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