In: Accounting
Solve for the unknown number of years in each of the following: (Do not round intermediate calculations and round your final answers to 2 decimal places.) Present Value Years Interest Rate Future Value $ 590 9 % $ 1,419 840 10 1,851 18,700 15 292,715 21,800 13 433,258
Future Value = Present Value * (1+Rate of Interest)^Time
Let the time be n years
1419=590*(1+9%)^n
(1419/590) = 1.09^n
Taking log on both sides,
log(1419/590)=n log(1.09)
n =log(1419/590) / log(1.09)
= 10.18 years
Answer = 10.18 years
----------
Future Value = Present Value * (1+Rate of Interest)^Time
Let the time be n years
1851=840*(1+10%)^n
(1851/840) = 1.10^n
Taking log on both sides,
log(1851/840)=n log(1.10)
n =log(1851/840) / log(1.10)
= 8.29 years
Answer = 8.29 years
----------
Future Value = Present Value * (1+Rate of Interest)^Time
Let the time be n years
292715=18700*(1+15%)^n
(292715/18700) = 1.15^n
Taking log on both sides,
log(292715/18700)=n log(1.15)
n =log(292715/18700) / log(1.15)
= 19.68 years
Answer = 19.68 years
----------
Future Value = Present Value * (1+Rate of Interest)^Time
Let the time be n years
433258=21800*(1+13%)^n
(433258/21800) = 1.13^n
Taking log on both sides,
log(433258/21800)=n log(1.13)
n =log(433258/21800) / log(1.13)
= 24.46 years
Answer = 24.46 years
----------