Question

1 year(s) ago, Fatima invested 5,800 dollars. In 2 year(s) from today, she expects to have 7,660 dollars. If Fatima expects to earn the same annual return after 2 year(s) from today as the annual rate implied from the past and expected values given in the problem, then in how many years from today does she expect to have exactly 10,300 dollars? Round your answer to 2 decimal places (for example, 2.89, 14.70, or 6.00). Number

Answer 1

Annual rate earned on the investment is calculated below:

5, 800 X (1+i) = 7,660

(1+2)=1.320689655

(1+ i) = 1.3206896553

(1+i) = 1.09715

i = 0.09715

The time at which amount reaches to 10,300 from zero time is calculated below:

5, 800 x (1 + 0.09715) = 10,300

(1+0.09715}" = 1.775862069

take log on both sides

nlog (1 + 0.09715) = log1.775862069

tog1.775862069 = log (1 + 0.09715)

n = 6.19

Thus, from today the time would be (6.19 - 1) = 5.19 years.