Question

using the time value of money charts provided in appendix c, answer the following question(s).

how many years will it take for $35 to grow to $53.87 if it is invested at 9% compounded annually?

4.0
6.0
5.0
5.5

Explanation:

Step1: Find future value factor

$\text{Future Value Factor} = \frac{\text{Future Value}}{\text{Present Value}} = \frac{53.87}{35} = 1.5391$

Step2: Match factor to 9% rate

Look up the future value of $1$ table for 9% annual rate, find the year where the factor equals ~1.5391. The factor for 5 years at 9% is $1.5386$, which is nearly equal to 1.5391.

Answer:

5.0