Answer to Question #246900 in Financial Math for Cbia

Question

David needs R30835,42 to buy a second hand trailer. How long will it take him to save towards this amount if he deposits R25000,00 now into a savings account earning 10,5% interest per year compounded weekly

Answer 1

In this we need to calculate number of weeks required to achieve that.

Deposit today=$25000

Future value=R30835.42

Interest rate=10.5%

$Weekly\space interest\space rate=\frac{10.5}{52}=0.2019230769\%\\ Future \space value= Deposit\space today (1+r)^n\\ 30835.42=25000(1.0020192307)^n\\ 1.2334168=(1.0020192307)^n\\ n=104\space weeks\\ n=2 \space years$

It will take 2 years to achieve that target.