Question

You expect to receive $10,000 at graduation in two years. You plan on investing it at 9 percent until you have $60,000. How long will you wait from now?

Answer 1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

60000=10000=(1.09)^n

(60000/10000)=(1.09)^n

Taking log on both sides;

log 6=n*log (1.09)

n=log 6/log(1.09)

=20.79 years(Approx).

Hence time to wait from now =20.79 +2

=22.79 years(Approx).