Youre trying to save to buy a new 200000 Ferrari You have 40

You\'re trying to save to buy a new $200,000 Ferrari. You have $40,000 today that can be invested at your bank. The bank pays 4.0 percent annual interest on its accounts. How long will it be before you have enough to buy the car?

41.29 years

41.04 years

41.54 years

40.79 years

39.04 years

Solution

let the number of years be n

200,000 = 40,000*1.04^n

log (200,000/40,000) = n log 1.04

n = 41.04 years