Question

In: Accounting

Solve for the unknown number of years in each of the following: (Do not round intermediate...

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

Solutions

Expert Solution

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

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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

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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

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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

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