Question

You have $21,632.69 in a brokerage account, and you plan to deposit an additional $6,000 at the end of every future year until your account totals $250,000. You expect to earn 10% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.

Answer 1

Total Future value = Present Value * ((1+r)^n) + annuities* (((1+r)^n)-1) / r

r is 10%, presently the account has 21632.69 (Present Value), annuity per year is $6000

250000 = (21632.69* ((1.10)^n)) + 6000 *(((1.10)^n)-1) /0.10)

Solve for n

You can use the NPER function in excel to solve for years

NPER(Rate, PMT, PV, FV, Type)

FV is entered as a negative figure

rate 10%, PMT 6000 at the end of each future year, PV 21632.69, FV 250,000

NPER(10%,6000,21632.69,-250000)

14.00yrs