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kifflom [539]
3 years ago
6

If an investment of $40,000 is earning an interest rate of 12.00%, compounded annually, then it will take 4.50 years for this in

vestment to reach a value of $66,610.22 ________ assuming that no additional deposits or withdrawals are made during this time.
Business
1 answer:
enot [183]3 years ago
8 0

Answer:

4.5 years

Explanation:

The computation of the number of years is shown below:-

Future value = Present value × (1 + interest rate)^n umber of years

$ 66,610.25 = $40,000 × (1 + 0.12)^n

$1.665256 = (1.12)^n

LN 1.665256 = n LN 1.12

0.509979 = n × 0.113329

n = 4.499

or

= 4.5 years

Therefore for computing the number of years we simply applied the above formula.

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Answer:

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Present value can be calculated using a financial calculator

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To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

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