You expect to receive $5,000 at graduation in two years. You plan on investing i

Question

You expect to receive $5,000 at graduation in two years. You plan on investing it at 12 percent until you have $95,000. How long will you wait from now? (Do not round your intermediate calculations.)

You expect to receive $5,000 at graduation in two years. You plan on investing it at 12 percent until you have $95,000. How long will you wait from now? (Do not round your intermediate calculations.)

You expect to receive $5,000 at graduation in two years. You plan on investing it at 12 percent until you have $95,000. How long will you wait from now? (Do not round your intermediate calculations.)

Explanation / Answer

Assume annualy compounded.

Cum. Amount = Principal*(1+r/100)^n

$95000= $5000*(1.12)^n

95000/5000= (1.12)^n

19= (1.12)^n

No. of periods= 26 year approx

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