Question

Problem 5-17 similar to) may invest He has found a mutual fund with an Solving for) Jack kedal to marry him, and she accepted under one condition Jack must buy her a new $330,000 Rolls Royce Phantom Jack cumany has $64.400 expected annetum of 71% in which he wil place the money How long will it take Jack to winas hand in manage? I s years Pound tone de place) The ber of years it will take for Jack to win Jars and in marriage is

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

330,000=44400*(1.071)^n

(330,000/44400)=(1.071)^n

Taking log on both sides;

log (330,000/44400)=n*log 1.071

n=log (330,000/44400)/log 1.071

=29.2 years(Approx)