Question

You have $2,000 today in your savings account. How long must you wait for your savings to be worth $4,500 if you are earning 1.25 percent interest, compounded annually

Answer 1

Answer:

n= 65.27 years

Explanation:

Giving the following information:

Present value (PV)= $2,000

Future value (FV)= $4,500

Interes rate (i)= 1.25% annual compounding

To calculate the number of years required to reach the objective, we need to use the following formula:

n= ln(FV/PV) / ln(1+i)

n= ln(4,500 / 2,000) / ln(1.0125)

n= 65.27 years