Answer :
Answer:
time = 32.70
Explanation:
given data
present value = $16000
earning interest = 1.00% per month
future value = $26,000
save additional = $100 per month
solution
we apply here future value annuity formula that is
future value annuity = present value × [tex](1+r)^{t}[/tex] + payment × [tex]\frac{(1+r)^t-1}{r}[/tex] ..........1
put here value and we get
$26,000 = $16000 × [tex](1+0.01)^{t}[/tex] + $100 × [tex]\frac{(1+0.01)^t-1}{0.01}[/tex]
$26000 = $16000 × [tex]1.01^t[/tex] - 1 + $1000 × ( [tex]1.01^t-1[/tex] )
$36000 + 1 = $26000 × [tex]1.01^t[/tex]
take ln both side and solve
t = 32.70