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Chapter 5 Assignment i Served Help Save & Exit Submit You expect to receive $26,000 at graduation in two years. You plan on i
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Answer #1

Future Value = Present Value(1+r)t

Let the no of years be t

161,000 = $ 26000(1+0.0925)t

(1+0.0925)t = 161,000/26,000

(1.0925)t = 6.19

Taking log both sides

log (1.0925)t = log 6.19

t * log 1.0925 = log 6.19

taking value of log

t * 0.03842 = 0.791691

t = 0.79169/ 0.03842

t = 20.61 years

It will take 20.61 years + 2 year = 22.61 year from now

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