Question

You currently have $3,400 in an investment account that returns 11% per year.
How long will you have to wait until you can make a $5,000 down payment on a new car?

Answer 1

Answer:

time period is 3.7 years

Explanation:

given data

currently amount = $3,400

returns = 11% per year = 0.11

down payment future value  = $5,000

solution

we will apply here future value formula

Future value = Principle × ( 1 + r )ⁿ    ....................1

put her value

$5,000 = $3,400 × ( 1 + 0.11 )ⁿ

1.4706 = ( 1 + 0.11 )ⁿ

now we will take log both side

log(1.4706) = log  ( 1 + 0.11 )ⁿ

0.1675 = n × 0.0453

n = 3.7 years

so time period is 3.7 years