Question

George Bennet wants to give his son $20,000 upon completion of his college education. If he invests $5,500 now in an account earning 9% annual interest, approximately how many years will it take for him to achieve his goal

Answer 1

It will take 16.09 years.

Step-by-step explanation:

Giving the following information:

Future value= $20,000

Present value= $5,000

Interest rate= 9%

To calculate the number of years required to reach the objective, we need to use the following formula:

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

n= ln(20,000 / 5,000) / ln(1.09)

n= 16.09

It will take 16.09 years.