Discrete Cash Flow: Compound Interest Factors8 = (P/A,7.5%,N)what is n ?

Discrete Cash Flow: Compound Interest Factors

8 = (P/A,7.5%,N)

what is n ?

Expert Solution

Ans. 8 = (P/A, 7.5%, N)

=> 8 = (1-1/(1+0.075)^N)/0.075

=> 1.075^N = 2.5

Using natural logarithm on both the sides, we get,

N * Ln1.075 = Ln2.5

[because Ln(x^a) = a*Lnx]

N = 12.6698 years

Rahul Sunny answered 2 years ago

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