Mary would like to retire with S963 n the bank. She has $350 today to place in a

Question

Mary would like to retire with S963 n the bank. She has $350 today to place in a retirement account that will earn an interest rate of 9% each year. How long and in fractions of a year to at least 2 decimal places) before she can retire? ill Mary need to wait in years Years Your answer must be in years and percent of a year. For example, the answer of 5.25 would be interpreted as 5 and one-quarter years, or 5.25 years. Submit your answer using 2 decimal places. Work your analysis using at least four decimal places of accuracy

Explanation / Answer

To calculate the time period, we can use following formula

FV = PV * (1+i) ^n

Where, FV is the future value = $963

Present Value (PV) =$350

i = I/Y = interest rate per year = 9%

And n is time period =?

Therefore,

$963 = $350 * (1+9%) ^n

$963/$350 = (1+9%) ^n

Or n = 11.7446 years

It will take 11.7446 years to grow money to $963 at 9% interest rate

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