Question

You’re trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 4.3 percent annual interest on its accounts. How long will it be before you have enough to buy the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

Explanation:

Current Balance (Today)= $50,000

Needed Balance = $245,000

Interest Rate = 4.30%

Let's suppose it will take n years to achieve the desired goal

$50,000 * (1+0.043)^n = $245,000

1.043^n = 245,000/50,000

1.043^n= 4.90

n = 37.75 years

So, it will take 37.75 years to save up to buy the car

Answer 2

After expenses and other commitments have been subtracted from income, the amount left over is considered savings. Savings are resources that would otherwise be inactive and would not be employed or expended on pleasure.

Savings accounts are quite safe, but they also provide very small investment returns.

Current Balance (Today)= $50,000

Needed Balance = $245,000

Interest Rate = 4.30%

Assume, it will take n years to achieve the desired goal.

$50,000 \times (1+0.043)^{n} = \ 245,000$

$1.043^{n} = \frac{245000}{50000}$

$1.043^{n}$= 4.90

n = 37.75 years

Hence, it will take 37.75 years to save up to buy the car.

To know more about the calculation of the number of years to purchase the car, refer to the link below:

https://brainly.com/question/11254180