Question

Timber Inc. invested profits of $150,000.00 in a GIC at 4.90% compounded quarterly. How long will it take for the investment to grow to a value of at least $223,000.00?____years ____monthsExpress the answer in years and months, rounded to the next month

Answer 1

Given:

Present value = 150,000

Future value=223000

rate = 4.90% compunded quarterly.

To find the number of periods,

`\begin{gathered} FV=PV(1+r)^n \\ 223000=150000(1+(0.049)/(4))^n \\ 223000=150000(1.01225)^n \\ (1.01225)^n=(223)/(150) \\ n=(\ln ((223)/(150)))/(\ln (1.01225)) \\ n=32.6 \end{gathered}`

Answer: 32.6 years that means 32 years and 6 months.