Question

Shelby currently has 13.200 dollars saved and plans to make annual savings contributions of 12,500 dollars. Her first annual savings contribution is expected in 1 year. Shelby expects to earn 14.54 percent per year. How many contributions of 12,500 dollars does Shelby need to make in order to have 177.227 dollars? Number

Answer 1

Answer
Shelby Annual Contribution	$       12,500.00
Return	14.54%
Future Value should be	$     177,227.00
No.of Years	?
Future Value	Annual Payment*((1+r)^n-1)/r
	$     177,227.00	=	((((1.1454)^n)-1)/0.1454)*12500
	177227/12500	=	((((1.1454)^n)-1)/0.1454)
	14.17816	=	((((1.1454)^n)-1)/0.1454)
	14.1782*0.1454	=	(((1.1454)^n)-1)
	2.0615	=	(((1.1454)^n)-1)
	2.0615+1	=	((1.1454)^n)
	3.0615	=	((1.1454)^n)
N(on trial and error Method)	8.25 Years
where
((1.1454)^8.25)	3.064762
Approximately, Shelby has to make 8 Contributions