You're trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 4.3 percent annual interest on its accounts. How long will it be before you have enough to buy the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Question

Jairo Greer

Business

15 March, 15:23

You're trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 4.3 percent annual interest on its accounts. How long will it be before you have enough to buy the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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Jadyn Spence · Answer 1

Current Balance (Today) = $50,000

Needed Balance = $245,000

Interest Rate = 4.30%

Let's suppose it will take n years to achieve the desired goal

$50,000 * (1+0.043) ^n = $245,000

1.043^n = 245,000/50,000

1.043^n = 4.90

n = 37.75 years

So, it will take 37.75 years to save up to buy the car