Question

John is investing $60,315 at the end of each year in a fund that earns 6% interest. Click here to view the factor table. In how many years will the fund be at $340,000? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 15.) Years

Answer 1

Future value of annuity= payment per period * [(1+i)^n-1]/i

i = interest rate per period

n = number of periods

=>

60315 * [(1+0.06)^n - 1]/0.06 = 340000

=>

1.06^n = 1.33822432231

=>

n = ln(1.33822432231)/ln(1.06)

= 5 years