Exponent help
 

Hello, my question deals with solver and exponents in excel. This may be too
technical but I'll give it a try. I'm using solver for calculating zero rate
or "spot rate" bond yields. Instead of using periodic interest rates you
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out. My teacher
showed us the answer in class but didn't go over the technique cause he
assumed we could figure it out. I'm unsure of how to do it with solver. Any
help would be greatly appreciated and I'll be glad to answer any questions.
Thanks

Exponent help
 

The first thing that comes to mind is: recapitulate this equation in Excel
and set Y to some value, say, 1, and then instruct Solver to solve the
equation to equal 104.21 by chaning the value in the cell that you set as Y =
1

Dave
--
Brevity is the soul of wit.


"Josh P." wrote:

Hello, my question deals with solver and exponents in excel. This may be too
technical but I'll give it a try. I'm using solver for calculating zero rate
or "spot rate" bond yields. Instead of using periodic interest rates you
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out. My teacher
showed us the answer in class but didn't go over the technique cause he
assumed we could figure it out. I'm unsure of how to do it with solver. Any
help would be greatly appreciated and I'll be glad to answer any questions.
Thanks

Exponent help
 

In B1 enter:
=4*(EXP(-(y*0.5))) +4*(EXP(-(y*1)))+4*(EXP(-(y*1.5)))+104*(EXP(-(y*2)))


The define y to be cell A1

Then run solver which supplies:

0.0566090568345708


--
Gary's Student
gsnu200701


"Josh P." wrote:

Hello, my question deals with solver and exponents in excel. This may be too
technical but I'll give it a try. I'm using solver for calculating zero rate
or "spot rate" bond yields. Instead of using periodic interest rates you
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out. My teacher
showed us the answer in class but didn't go over the technique cause he
assumed we could figure it out. I'm unsure of how to do it with solver. Any
help would be greatly appreciated and I'll be glad to answer any questions.
Thanks

Exponent help
 

Put the formula =4*(EXP(-A1*0.5))
+4*(EXP(-A1*1))+4*(EXP(-A1*1.5))+104*(EXP(-A1*2)) into cell A2
In Solver ask it to set B1 to 104.21 by changing A1.
You could also use Goal Seek.
--
David Biddulph

"Josh P." <Josh wrote in message
...
Hello, my question deals with solver and exponents in excel. This may be
too
technical but I'll give it a try. I'm using solver for calculating zero
rate
or "spot rate" bond yields. Instead of using periodic interest rates you
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out. My teacher
showed us the answer in class but didn't go over the technique cause he
assumed we could figure it out. I'm unsure of how to do it with solver.
Any
help would be greatly appreciated and I'll be glad to answer any
questions.
Thanks

Exponent help
 

it looks like u have only one variable...
try goal seek...


--
*****
birds of the same feather flock together..



"Josh P." wrote:

Hello, my question deals with solver and exponents in excel. This may be too
technical but I'll give it a try. I'm using solver for calculating zero rate
or "spot rate" bond yields. Instead of using periodic interest rates you
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out. My teacher
showed us the answer in class but didn't go over the technique cause he
assumed we could figure it out. I'm unsure of how to do it with solver. Any
help would be greatly appreciated and I'll be glad to answer any questions.
Thanks

Exponent help
 

Another approach to the problem, which avoids Solver altogether, is to note
that this is a quartic equation in x=exp(-y/2). Quartic equations have known
solutions
http://en.wikipedia.org/wiki/Quartic_equation
Ferrari's method has a solution with real x0 [so that y=-2*ln(x) is also
real] by taking +/-[s] to be - and +/-[t] to be + to get
x=0.97209229125665744 or y=-2*ln(x)=0.056609058353243358

Jerry

"Josh P." wrote:

Hello, my question deals with solver and exponents in excel. This may be too
technical but I'll give it a try. I'm using solver for calculating zero rate
or "spot rate" bond yields. Instead of using periodic interest rates you
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out. My teacher
showed us the answer in class but didn't go over the technique cause he
assumed we could figure it out. I'm unsure of how to do it with solver. Any
help would be greatly appreciated and I'll be glad to answer any questions.
Thanks

Exponent help
 

Nice one Jerry. :)

--
HTH :)
Dana DeLouis
Windows XP & Office 2003


"Jerry W. Lewis" wrote in message
...
Another approach to the problem, which avoids Solver altogether, is to
note
that this is a quartic equation in x=exp(-y/2). Quartic equations have
known
solutions
http://en.wikipedia.org/wiki/Quartic_equation
Ferrari's method has a solution with real x0 [so that y=-2*ln(x) is also
real] by taking +/-[s] to be - and +/-[t] to be + to get
x=0.97209229125665744 or y=-2*ln(x)=0.056609058353243358

Jerry

<snip
have to use continuous compounding. Here is the formula with the numbers
inputed and I'll use "Y" as the variable to solve for:

4(EXP-(Y*.5)) +4(EXP-(Y*1))+4(EXP-(Y*1.5))+104(EXP-(Y*2.0))

all of this must equal 104.21 when the equation is solved out.
<snip