Question

How long will it take $ 50000 placed in a savings account at​ 10% interest to grow into $ 75000 ​? A. 5.25 years B. 4.25 years C. 3.25 years D. 6.25 years

Answer 1

Information provided:

Present value= $50,000

Future value= $75,000

Interest rate= 10%

The time taken for $50,000 to grow to $75,000 is solved with the help of a financial calculator.

Enter the below in a financial calculator to compute the time:

PV= -50,000

FV= 75,000

I/Y= 10

Press the CPT key and N to calculate the time taken for $50,000 to grow to $75,000.

The value obtained is 4.25 years.

Therefore, it takes 4.25 years for $50,000 to grow to $75,000.

The answer is option b.