Question

You currently have $8,700 (Present Value) in an account that has an interest rate of 3% per year compounded annually (1 times per year). You want to withdraw all your money when it reaches $18,270 (Future Value). In how many years will you be able to withdraw all your money?

Answer 1

Approximately, in 25 years, your present value of $8,700 investment will reach the future value of $18,270 at 3% per year compounded annually.

What is the present value?

The present value is the future value discounted for a period to the current time.

The future value refers to the present value that yields a compounded value in the future.

An investment's period (N) can be computed using an online finance calculator as follows:

Data and Calculations:

I/Y (Interest per year) = 3%

PV (Present Value) = $8,700

FV (Future Value) = $18,269.79

PMT (Periodic Payment) = $0

Results:

N (# of periods) = 25.1

Total Interest = $9,569.79

Thus, in 25 years, the future value of $18,270 will be ready to be withdrawn.

Learn more about the present and future values at brainly.com/question/24703884

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