Question

You expect to receive a payout from a trust fund in 3 years. The payout will be for $10,200. You plan to invest the money at an annual rate of 6.2 percent until the account is worth $17,800. How many years do you have to wait from today

Answer 1

Answer:

n= 12.25 years

Explanation:

Giving the following information:

Present value= $10,200

Future value= $17,800

Interest rate= 6.2%

First, we need to calculate the number of years it will take the investment to reach $17,80. We need to use the following formula:

n= ln(FV/PV) / ln(1+i)  

n= ln(17,800/10,200) / ln(1.062)

n= 9.25 years

Now, the total number of years:

n= 9.25 + 3

n= 12.25 years