Present Value of an Ordinary Annuity of 1

Accounting
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Bogut just rec'd a signing bonus of $1,000,000. He plan to invest this in a fund that will earn 8% compound annually. Bogut plans to establish the AB Foundation once the fund grows to $1,999,000, how many years until he can establish the foundation?

Mar 8th, 2015

we have 1000000*(1.08)^n = 1999000

1.08^n =1.999

n ln(1.08 ) = ln(1.999)

n = n(1.999)/ln(1.08) = 0.692647/0.076961= 8.99997 = 9 

Answer = 9 years

Mar 8th, 2015

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