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You expect to receive $11,000 at graduation in two years. You plan on investing it at 11 percent until you have $77,000. How long will you wait from now? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Number of years

Respuesta :

truonghanhduyen

Answer:

20.65 years

Explanation:

The number of years for investing $11,000 at rate 11% to have $77,000

PV: $11,000

FV: $77,000

Rate: 11%

FV = PV*(1+rate)^tenor

⇔ 77000 = 11000*(1+11%)^tenor

⇔ (1.11)^tenor = 77000/11000 = 7

we do the logarithm of number 7 base 1.11  to have tenor:

Tenor = 18.65 years

Together with 2 years waiting for graduation, you have to wait 20.65 yerars to have $77,000 from now.

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