Answered: If you plan to make an initial…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter4: Managing Your Cash And Savings

Section: Chapter Questions

Problem 7FPE: Calculating interest earned and future value of savings account. If you put 6,000 in a savings...

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If you plan to make an initial contribution of $6,000 to a retirement account in 5 years and you will make annual contributions of $6,000 thereafter, after how many contributions will your balance have reached at least $900,000 if your account earns 5.5% annual interest

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This helps ALOT but now I am confused how you got 41.55? if I take 1.055 /9.25 =.11405 which if you move the decimal points gives you 40.5 or 41 but that is not making sense? Sorry this is all new to me

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I need to fill in the gap here and need this broken down a bit further

Where did the 9.25 come from?

Also, if 6000 x 1.055^n - 1 / .055 should equal 6000 (.055 /.055=1 x 6000). How did you get 1.055^n?

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