You're trying to save to buy a new $80,000 speedboat to take to the lake. You...

You're trying to save to buy a new $80,000 speedboat to take to the lake. You have $65,000 today that can be invested at your bank. The bank pays 6% annual interest on its accounts. How long will it be before you have enough to buy the speedboat?

Solutions

Expert Solution

Future value = 80000

Present value = 65000

Interest rate per year = 6%

The number of years required can be solved by using NPER function of excel

=NPER(0.06,0,-65000,80000,0)

= 3.56 years

Hence after 3.56 years the speedboat can be bought

jeff jeffy answered 2 years ago

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