Question
In: Economics
Acme Bricks, a masonry products company, wants to have $600,000 on hand before it invests in...
Acme Bricks, a masonry products company, wants to have $600,000 on hand before it invests in new conveyors, trucks and other equipment. If the company sets aside $80,000 per year in an account that increases in value at a rate of 15% per year, how many years will it be before Acne can purchase the equipment?
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Solutions
Expert Solution
We have been given the following information
Company is saving $80,000 per annum
Increase rate = 15% per annum
Amount needed = $600,000
Formula used = Previous Year Amount × (1 + 0.15)
|
Year |
Amount Saved |
|
Year 1 |
80,000 |
|
Year 2 |
92,000 |
|
Year 3 |
105,800 |
|
Year 4 |
121,670 |
|
Year 5 |
139,921 |
|
Year 6 |
160,909 |
|
Year 7 |
185,045 |
|
Year 8 |
212,802 |
|
Year 9 |
244,722 |
|
Year 10 |
281,430 |
|
Year 11 |
323,645 |
|
Year 12 |
372,191 |
|
Year 13 |
428,020 |
|
Year 14 |
492,223 |
|
Year 15 |
566,056 |
|
Year 16 |
650,965 |
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