BuyFindarrow_forward

Fundamentals of Financial Manageme...

9th Edition
Eugene F. Brigham + 1 other
ISBN: 9781305635937

Solutions

Chapter
Section
BuyFindarrow_forward

Fundamentals of Financial Manageme...

9th Edition
Eugene F. Brigham + 1 other
ISBN: 9781305635937
Textbook Problem
21 views

TIME TO REACH A FINANCIAL GOAL You have $33,556.25 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $220,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal?

Summary Introduction

To determine: Thenumber of years it will take to reach the goal.

Introduction:

PresentValue:

The present value is the current value by which the future value of the annuity is determined. The calculation of the future value depends on the present value, which is calculated using a discount rate.

Future Value:

The future value means the value of the investment, which will be realized in the future. With the help of the calculation of future value, an analysis of the amount to be invested can be made. This is very useful for the financial users and investors.

Explanation

Given information:

The amount present in the account is $33,556.25.

The amount to be deposited at the end of every year is $5,000.

The interest rate is 12% annually.

The expected future value is $220,000.

Calculation of the number of years:

The number of months is calculated using excel ‘NPER’ function.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Explain why the long-run aggregate-supply curve is vertical.

Brief Principles of Macroeconomics (MindTap Course List)

What is inflation and what causes it?

Essentials of Economics (MindTap Course List)

EFFECTIVE VERSUS NOMINAL INTEREST RATES Bank A pays 4% interest compounded annually on deposits, while Bank B p...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What steps are followed in posting from the cash payments journal to the accounts payable ledger?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)