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Youve been saving up to buy the Godot Company. The total cost will be $10 million. You currently have about $2.3 million. If you can earn 5 percent on your money, how long will you have to wait? At 16 percent, how long must you wait? At 5 percent, youll have to wait a long time. From the basic present value equation:
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Function Arguments 个 = 0.05 Rate 5% Pmt 0 Pv 2.3 2.3 Fv 10 - number Type 30.12238215 Returns the number of periods for an investment based on periodic, constant payments and a constant interest rate. Type is a logical value: payment at the beginning of the period 1; payment at the end of the period 0 or omitted. Formula result = 30.12 OK Cancel Help on this function

At 5%, Waiting time is 30.12 years

Function Arguments Rate 16% 10.16 Pmt 0 Pv 2.3 个 -2.3 Fv 10 Type - number 9.902142025 Returns the number of periods for an investment based on periodic, constant payments and a constant interest rate. Type is a logical value: payment at the beginning of the period 1; payment at the end of the period 0 or omitted. Formula result OK Cancel

At 5%, Waiting time is 9.90 years

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