L06-4 Determining an Unknown Number of Periods (Class Activities #5) You want to invest $10,000 today...

Question

Question

Answer 1

Answer #1

FV =PV(1+i)^n	$16,000 =$10,000*(1+0.10)^n
	(1+0.10)^n =$16,000/$10,000
	(1+0.10)^n =1.60
	n =5 Years
You can also use the PV table for calculation
PV of 10% for 5 years which is PVIF(10%,5 years) is 0.62092
So FV =$16,000
PV =$16,000*0.62092 =$10,000(apprx)

Answer 2

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