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3 August, 12:45

You have $40,549.50 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals $210,000. You expect to earn 11% annually on the account. How many years will it take to reach your goal? Round your answer to the nearest whole number.

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  1. 3 August, 14:45
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    It will take 25.12 or 25 years to reach the desired goal.

    Explanation:

    Given:

    Amount in brokerage account which is the present value = $40,549.5

    Additional annual deposits which is PMT or payment = $3,000

    Rate of interest = 11% or 0.11

    Desired goal or future value = $210,000

    Use excel function (nper) to calculate number of years required to achieve desired goal.

    Formula is = NPER (rate, pmt, PV, FV)

    The same is calculated in the following excel.

    Therefore, it will take 25 years to achieve desired goal.
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