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Maria invests $40,000 in a mutual fund compounding at a rate of 5.5% annually. If she makes no additional deposits or withdrawals, how many years will it take for the value of the mutual fund to reach a value of $85,000 (nearest cent)? Show steps to the solution.

 Dec 18, 2019
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FV = future value = 85000    (given)

PV = present value = 40000  (given)

i = interest (in decimal) = .055  (given)

t = years   what you are looking for to answer this Q

 

FV = PV (1+i)t

 

FV/PV = (1.055)t

 

85000/40000 = (1.055)t      Solve for the exponent 't' ....you should already know how to do this......cheeky

 Dec 18, 2019
edited by ElectricPavlov  Dec 18, 2019

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