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Answer to Question #3305 in Statistics and Probability for atakan oluwafemi

Question #3305
How many years will it take for $240000 to amount to $288000 at 8% compound interest per annum?
Expert's answer
The most basic formula to calculate future value is
FV = PV(1 + i)n , where i is the compound interest, n is number of periods.
(1 + i)n = FV/PV
Hence
n = log(1+ i)(FV/PV) = (ln FV - ln PV)/ln (1 + i)
In our case
n = (ln 288,000 - ln 240,000)/ ln (1 + 0.08) = 2.37

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