Question

You're trying to save to buy a new $220,000 Ferrari. You have $33,000 today that can be invested at your bank. The bank pays 4.0 percent annual interest on its accounts. How long will it be before you have enough to buy the car

Answer 1

The answer is 48.37

Step-by-step explanation:

Future value (FV) = $220,000

Present value(PV) = $33,000

Interest rate(i) = 4 percent.

Number of years(N)= ?

Using the Texas BA II Plus financial calculator:

FV = 220,000; PV = - 33,000; I/Y= 4;

CPT N= 48.37

Therefore, the number of years is 48.37 years. It will take him 48.37 years to invest $33,000 today at a 4 percent rate in order to buy the car at a cost of $220,000