Please explain the formula that is used to solve the following:
- What will $200,000 grow to be in 15 years if it is invested today in an account with an annual interest rate of 8%?
- How many years will it take for $192,000 to grow to be $500,000 if it is invested in an account with an annual interest rate of 8%?
- At what annual interest rate must $272,000 be invested so that it will grow to be $477,000 in 5 years?
I used the following function keys to solve this problem in spreadsheet:
- If you wish to accumulate $325,000 in 15 years, how much must you deposit today in an account that pays an annual interest rate of 8%:
Functions Answer
- Future Value FV $102,453.55
- Present Value PV
- Rate I
- Period n