Answer: 170.69
Explanation:
Given that,
Anticipated total cost (Future value) = $158.82 million
= $158,820,000
Saving per month = $590,000
Interest received on savings = 6 percent (compounded monthly)
Future value = $158,820,000
[tex]saving\ amount\times\frac{(1+\frac{r}{12} )^{n-1} }{\frac{r}{12}}[/tex]
[tex]590,000\times\frac{(1+\frac{0.06}{12} )^{n-1} }{\frac{0.06}{12}}[/tex]
[tex]\frac{(1.005)^{n-1}}{0.005}=269.1864[/tex]
Therefore,
n = 170.69 months
Company have to wait before expanding its operations for 170.69 months.
