You expect to receive $5,000 at graduation one year from now. your plan is to investthis money at 6.5 percent, compounded annually, until you have $50,000. at that time, you plan to travel around the world. how long from now will it be until you can beginyour travels?

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Business

Deven Cherry

9 January, 08:58

You expect to receive $5,000 at graduation one year from now. your plan is to investthis money at 6.5 percent, compounded annually, until you have $50,000. at that time, you plan to travel around the world. how long from now will it be until you can beginyour travels?

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Isabelle Kirby · Answer 1

After one year, the amount will be (1.065) ($5000) After two years, the amount will be (1.065) (1.065) ($5000) This equals (1.065) ^2 ($5000) After n years, the amount will be (1.065) ^n ($5000) (1.065) ^n ($5000) = $50,000 (1.065) ^n = 10 (n) (ln (1.065)) = ln (10) n = ln (10) / ln (1.065) n = 37 You can begin your travels in about 37 years.