You expect to recieve $15,000 at graduation in two years. You plan on investing in at 9% until you have $75,000. How long will you wait from now?
Future value is the value of the assets or investment or amount to be received at a predetermined interest rate after a specific time.
The future value is the discounted value of present cash flows in today's dollars.
Answer and Explanation:
In this question we are given with the future and present values along with rate, and have to to find the number of years, we know
Future value = P*(1+r)^n
P is payment
r is interest rate per period
n is number of periods
$75,000 = $15,000*(1+9%)^n
n = 18.68 years nearly
So total time = 18.68+ 2 = 20.68
Hence, 20.68 years from now
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from Financial Accounting: Help and ReviewChapter 5 / Lesson 16
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