Question

Isaac only has $1,090 today but needs $1,979 to buy a new computer. How long will he have to wait to buy the computer if he earns 5.4 percent compounded annually on his savings? Assume the price of the computer remains constant. 11.83 years

Answer 1

Answer:

It will take 11 years and 124 days.

Explanation:

Giving the following information:

Isaac only has $1,090 today but needs $1,979 to buy a new computer. Interest rate= 5.4 percent compounded annually

To calculate the number of years, we need to use an alternative formula of the future value formula.:

FV= PV*(1+i)^n

Isolating n:

n=[ln(FV/PV)]/ln(1+r)

n= [ln(1,979/1,090)] / ln(1.054)

n= 11.34 years

To be more accurate:

0.34*365= 124

It will take 11 years and 124 days.

Answer 2

Answer: Isaac will have to wait for 11.34 years for the money to grow to that amount

Explanation:

Please, kindly see the attached for more explanation