### Investment Problem **Question:** Sally Ross has $19,000 to invest today at 9% to pay a debt of $37,859. How many years will it take her to accumulate enough to liquidate the debt? *(Round answer to 0 decimal places, e.g., 45.)* **Input Box:** - [___________] years #### Explanation: This problem involves calculating the time required for an investment to grow to a certain amount using a specified interest rate. Sally aims to accumulate sufficient funds with an initial investment of $19,000 at an annual interest rate of 9% to pay off a debt of $37,859. The solution requires using the formula for compound interest: \[ A = P(1 + r)^t \] Where: - \( A \) is the amount of money accumulated after n years, including interest. - \( P \) is the principal amount ($19,000 in this case). - \( r \) is the annual interest rate (0.09 here). - \( t \) is the time the money is invested for in years. The task is to find \( t \) when \( A = 37,859 \).
### Investment Problem **Question:** Sally Ross has $19,000 to invest today at 9% to pay a debt of $37,859. How many years will it take her to accumulate enough to liquidate the debt? *(Round answer to 0 decimal places, e.g., 45.)* **Input Box:** - [___________] years #### Explanation: This problem involves calculating the time required for an investment to grow to a certain amount using a specified interest rate. Sally aims to accumulate sufficient funds with an initial investment of $19,000 at an annual interest rate of 9% to pay off a debt of $37,859. The solution requires using the formula for compound interest: \[ A = P(1 + r)^t \] Where: - \( A \) is the amount of money accumulated after n years, including interest. - \( P \) is the principal amount ($19,000 in this case). - \( r \) is the annual interest rate (0.09 here). - \( t \) is the time the money is invested for in years. The task is to find \( t \) when \( A = 37,859 \).
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
Related questions
Question
100%
![### Investment Problem
**Question:**
Sally Ross has $19,000 to invest today at 9% to pay a debt of $37,859. How many years will it take her to accumulate enough to liquidate the debt? *(Round answer to 0 decimal places, e.g., 45.)*
**Input Box:**
- [___________] years
#### Explanation:
This problem involves calculating the time required for an investment to grow to a certain amount using a specified interest rate. Sally aims to accumulate sufficient funds with an initial investment of $19,000 at an annual interest rate of 9% to pay off a debt of $37,859.
The solution requires using the formula for compound interest:
\[ A = P(1 + r)^t \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount ($19,000 in this case).
- \( r \) is the annual interest rate (0.09 here).
- \( t \) is the time the money is invested for in years.
The task is to find \( t \) when \( A = 37,859 \).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7b9bc12-9bec-475d-bc99-e13d2a9b76e2%2Fa50837fb-401c-455c-8b0b-563f59c9a946%2Fgikaw3.jpeg&w=3840&q=75)
Transcribed Image Text:### Investment Problem
**Question:**
Sally Ross has $19,000 to invest today at 9% to pay a debt of $37,859. How many years will it take her to accumulate enough to liquidate the debt? *(Round answer to 0 decimal places, e.g., 45.)*
**Input Box:**
- [___________] years
#### Explanation:
This problem involves calculating the time required for an investment to grow to a certain amount using a specified interest rate. Sally aims to accumulate sufficient funds with an initial investment of $19,000 at an annual interest rate of 9% to pay off a debt of $37,859.
The solution requires using the formula for compound interest:
\[ A = P(1 + r)^t \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount ($19,000 in this case).
- \( r \) is the annual interest rate (0.09 here).
- \( t \) is the time the money is invested for in years.
The task is to find \( t \) when \( A = 37,859 \).
Expert Solution
Step 1
It can be calculated using Nper function in excel
=NPER(rate,pmt,pv,[fv],[type])
- Rate The interest rate for the loan.
- Nper The total number of payments for the loan.
- Pmt payment per period
- Pv The present value
- Fv The future value
- Type The number 0 (zero) or 1 and indicates when payments are due.
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education