e-ISSN 2231-8542
ISSN 1511-3701

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General Formula for Calculating Accumulated Amount Based on Average Lowest Balance Concept

Wahab, Z. A., Embong, R., Azmi, A. and Isa, N. B. M.

Pertanika Journal of Tropical Agricultural Science, Volume 26, Issue 1, January 2018

Keywords: Investment, average lowest balance, pattern analysing, general formula, accumulated amount

Published on: 18 Jan 2018

One of the ways to calculate dividend for an investment is by using average lowest balance (ALB) concept. The existing calculation of dividend based on ALB concept can only be done yearly. This paper discusses on the development of a general formula to calculate the accumulated amount for any period of time, based on the ALB concept that considers different yearly dividend rates. The patterns for each variable and coefficient for the calculated yearly accumulated amount were analysed. The general forms of each variable and coefficient were then combined to form the general formula for calculating the accumulated amount. Validity of the general formula is confirmed by calculating the percentage errors and proven by using mathematical induction.

ISSN 1511-3701

e-ISSN 2231-8542

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