Question

You have $6,000 and will invest the money at an interest rate of .23 percent per month until the account is worth $11,200. How many years do you have to wait until you reach your target account value

Answer 1

22.94 years

Step-by-step explanation:

The formula to calculate the number of periods of time is:

n = ln(FV / PV)/ln(1+r), where

n= number of periods of time

FV= Future value= $11,200

PV= Present value= $6,000

r= interest rate= 0.0023*12 (to calculate the rate per year)= 0.0276

n=ln(11,200/6,000)/ln(1+0.0276)

n=0.624/0.0272

n=22.94

According to this, you have to wait 22.94 years until you reach your target account value.