Homework Answers
Answer
a)
FV=PV*(1+i)^n
FV=future value =?
Present value =PV=10000
n=months=5*12=60
i=interest rate per month effective =3.2/12=0.266666667
FV=10000*(1+0.00266666667)^60
=11732.6099
the amount after 5 years is $11732.6099
=================
b)
Interest amount =FV-PV=11732.6099-10000=1732.6099
=============
c)
n=ln(FV/PV)/ln(1+i)
=ln(50000/10000)/(ln(1+0.00266666667))
=604.343578
years =number of months /12
=604.343578/12
=50.3619648
it will take 50.36 years to be $50000
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