Question

An investment of $8500 increases in value by 4.5% every year. How long until the investment

reaches about $17,323. Round to the nearest whole year

Answer 1

At an interest rate of 4.5% compounded annually, it will take 16.17 years to reach $17,323.-

Explanation:

Giving the following information:

Present Value (PV)= $8,500

Future value (FV)= $17,323

Interest rate (i)= 4.5%

To calculate the time required for the investment to reach the objective, we need to use the following formula:

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

n= ln(17,323/8,500) / ln(1.045)

n= 16.17 years

At an interest rate of 4.5% compounded annually, it will take 16.17 years to reach $17,323.-