Question

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.): Years Present Value $ 630 880 19,100 22,200 Interest Rate 8 % 12 18 Future Value 1.496 2,496 392,101 403,794

Answer 1

Answer to Question 1:

Case A:

Present Value * (1 + Interest Rate)^Years = Future Value
$630 * 1.08^Years = $1,496
1.08^Years = 2.37460
Years * ln(1.08) = ln(2.37460)
Years = 11.24

Case B:

Present Value * (1 + Interest Rate)^Years = Future Value
$880 * 1.12^Years = $2,496
1.12^Years = 2.83636
Years * ln(1.12) = ln(2.83636)
Years = 9.20

Case C:

Present Value * (1 + Interest Rate)^Years = Future Value
$19,100 * 1.18^Years = $392,101
1.18^Years = 20.52885
Years * ln(1.18) = ln(20.52885)
Years = 18.26

Case D:

Present Value * (1 + Interest Rate)^Years = Future Value
$22,200 * 1.14^Years = $403,794
1.14^Years = 18.18892
Years * ln(1.14) = ln(18.18892)
Years = 22.14