Respuesta :
19.47 years you have to wait until you reach your target account value .
FV = PV x (1 + r)n
$4,975 = $3,400 x 1.0049n
$4,975 / $3,400 = 1.0049n
1.4632 = 1.0049n
ln[1.4632] = n[ln(1.0049)]
0.3806 = n[0.0049]
n = 0.3806 / 0.0049 = 77.87 quarters
Years to wait = 77.87 / 4 = 19.47 years
What Is Present Value (PV) ?
A future sum of money or stream of cash flows' present value (PV), assuming a particular rate of return, is their current value. The discount rate determines the current value of future cash flows; the greater the discount rate, the lower the present value of the future cash flows. The key to correctly valuing future cash flows, whether they be earnings or debt obligations, is determining the right discount rate.
The idea of present value holds that money today is worth more than it will be in the future. In other words, money received in the future is not as valuable as money obtained now in the same amount.
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https://brainly.com/question/20813161
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