A family has a goal of saving $31,000 to be used as the down payment for a house. If they put $27,500 into an account earning 6.72% interest compounded monthly, how many years will it take until the account has $31,000 in it? Round your final answer to two decimal places.
A family has a goal of saving $31,000 to be used as the down payment for a house. If they put $27,500 into an account earning 6.72% interest compounded monthly, how many years will it take until the account has $31,000 in it? Round your final answer to two decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A family has a goal of saving $31,000 to be used as the down payment for a house. If they put $27,500 into an account earning 6.72% interest compounded monthly, how many years will it take until the account has $31,000 in it? Round your final answer to two decimal places.
Expert Solution
Step 1
The number of years it will take to reach the amount of $31,000 can be determined using NPER function in excel.
The interest rate is compounding monthly. Hence, first number of months should be calculated then number of years should be calculated.
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