Homework Help: Finance

Posted by Debbie on Monday, May 14, 2012 at 10:51pm.

How long will it take you to accumulate $10,000 if you save $250 a month starting next month? Assume you can earn an APR of 2.4% on your savings.

Finance - Reiny, Tuesday, May 15, 2012 at 12:02am
i = .025/12 = .002083333..
n = ?
10000= 250( 1 - 1.00208333^-n)/.00208333
.0833333 = 1 - 1.00208333^-n
1.00208333^-n = .9166666
take log of both sides and use log rules
-n log 1.002083333 = log .916666
-n = -41.8
n = 41.8 months

appr. 42 months

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