Answer to Question #150416 in Financial Math for EL-FRIDA

Question

You have been saving to buy a dream house. The total cost of the house is 1000000 and you currently have 2500000.if you can earn 5% interest on your money, how long will you have to wait in order to buy the house.

Answer 1

Answer:

If there is no mistake in your currently money value and it is not excess zero in the 2500000, so the answer is 0 years, cause you have already enough money to buy your house.

If there is excess zero and real amount of money is 250000, so we must write following inequality:

250000*1.05^N >=1000000, where N - is required years and 1.05 is coefficient to get amount after earning (100 %+ 5 %).

To find out "N" in this inequality we are to rewrite it in following form:

log_1.05(1000000/250000) >=N => log_1.05(4) >=N .

So N <= 28.413 years and after rounding:

N = 29 years.

You have to 29 years to buy your dream house.