Paul wants to accumulate $14,500 in order to make the down payment for a new condo. Today he can start investing $2,500 annually in an investment account that pays 10 percent interest compounded annually. How long would it take him to have enough money to make the down payment? a) 5.90 years b) 6.10 years c) 3.50 years d) 7.60 years e) 4.44 years

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Business

Quinn Salas

18 August, 16:42

Paul wants to accumulate $14,500 in order to make the down payment for a new condo. Today he can start investing $2,500 annually in an investment account that pays 10 percent interest compounded annually. How long would it take him to have enough money to make the down payment? a) 5.90 years b) 6.10 years c) 3.50 years d) 7.60 years e) 4.44 years

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Answers (1)

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Mariyah Goodman · Answer 1

4.80 years

Explanation:

We use the NPER formula in this question which is shown in the spreadsheet.

The NPER represents the time period. inv

Given that,

Present value = $0

Future value = $14,500

PMT = $2,500

Rate of interest = 10%

The formula is shown below:

= NPER (Rate, PMT,-PV, FV, type)

The PMT come in negative

So, after solving this, the answer would be 4.80 years