Scribd
Upload
31 views2 pages

Compounded Interest Rate With Python

Famous question in social media: What supposed to be an interest rate to make 1USD savings per day for 365 days to become 30000

Uploaded by

Gasimovsky
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
31 views2 pages

Compounded Interest Rate With Python

Famous question in social media: What supposed to be an interest rate to make 1USD savings per day for 365 days to become 30000

Uploaded by

Gasimovsky
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

What supposed to be an interest rate to make 1usd savings per day for 365 days to become 30000

To find the interest rate that would make daily savings of $1 grow to $30,000 over 365 days, we
can use the formula for the future value of a series of equal payments (an annuity), with interest
compounded daily.

The future value FVFVFV of an annuity can be calculated using the formula:
FV=P×(1+r)n−1rFV = P \times \frac{(1 + r)^n - 1}{r}FV=P×r(1+r)n−1

Where:

 PPP is the amount saved daily ($1)


 rrr is the daily interest rate
 nnn is the total number of payments (365)
 FVFVFV is the future value ($30,000)

Given FV=30,000FV = 30,000FV=30,000, P=1P = 1P=1, and n=365n = 365n=365, we need to


solve for rrr.

Rearranging the formula to solve for rrr: 30,000=1×(1+r)365−1r30,000 = 1 \times \frac{(1 +


r)^{365} - 1}{r}30,000=1×r(1+r)365−1

This equation is complex to solve algebraically, so we'll use numerical methods to find rrr. Let's
calculate this using Python.

To achieve a future value of $30,000 from daily savings of $1 over 365 days, the required annual
interest rate would be approximately 51833.51%. This is an extraordinarily high interest rate and
is not feasible in any standard financial scenario. It suggests that reaching $30,000 from such
small daily savings in such a short period is unrealistic under normal financial conditions.

from scipy.optimize import fsolve

# Define the function based on the formula

def future_value_daily_savings(r, P, n, FV):

return P * ((1 + r)**n - 1) / r - FV

# Constants

P=1 # Daily savings amount in USD


n = 365 # Total number of days

FV = 30000 # Future value in USD

# Initial guess for the interest rate

initial_guess = 0.1

# Solving for the daily interest rate

daily_interest_rate, = fsolve(future_value_daily_savings, initial_guess, args=(P, n, FV))

# Converting the daily interest rate to an annual interest rate

annual_interest_rate = (1 + daily_interest_rate) ** 365 - 1

annual_interest_rate

You might also like