How long will it take $2000 to reach $6600 when it grows at 12 percent per year?
| We can use the future value of sum formula to calculate the no.of years required to reach the goal. | |||||||||
| FV = P * (1+r)^n | |||||||||
| FV = Future value = $6,600 | |||||||||
| P = Deposit amount = $2000 | |||||||||
| r = rate of interest per year = 12% | |||||||||
| n = no.of years required = ? | |||||||||
| 6600 = 2000 * (1+0.12)^n | |||||||||
| 3.30 = 1.12^n | |||||||||
| n = 10.53 | |||||||||
| No.of years required to reach the goal = 10.53 years | |||||||||
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