Solve for the unknown number of years in each of the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Present Value $400, $2091, $33105, $32800 Interest Rate 12%, 10%, 15%, 22% Future Value $1255, $3850, $388620, $202748
Present value = 400 and Future value = 1255 at a rate of 12%
We have Future value = Present value * ( 1 + r )n
= 400 * (1.12)n = 1255
(1.12)n = 1255 / 400 = 3.1375
Take log on both sides
n * Log (1.12) = Log (3.1375)
n * 0.049218 = 0.496584
n = 0.496584 / 0.049218 = 10.09 Years
Case - II
Present value = 2091, Future value = 3850 at 10%
2091 * (1.10 )n = 3850
(1.10 )n = 3850 / 2091 = 1.841224
n * Log (1.10) = Log (1.841224)
n * 0.041392685 = 0.26510663
n = 0.26510663 / 0.041392685 = 6.40 Years
Case - III
33105 ( 1.15)n = 388620
( 1.15)n = 388620 / 33105 = 11.73901223
n * Log (1.15) = Log ( 11.73901223)
n * 0.06069784 = 1.06963156
n = 1.06963156 / 0.06069784 = 17.62
Case - 4
32800 * ( 1.22)n = 202748
( 1.22)n = 202748 / 32800 = 6.18134146
n * Log (1.22) = Log (6.18134146)
n * 0.08635983= 0.791083
n = 0.791083 / 0.08635983
n = 9.16 Years
Get Answers For Free
Most questions answered within 1 hours.