It will take 12 years for the principal of $1,600 invested at 8.25% interest, compounded annually to accumulate $4,000 or more in the account.
Calculating the investment period:
We can compute the investment period using an online finance calculator as follows:
Data and Calculations:
I/Y (Interest per year) = 8.25%
PV (Present Value) = $1,600
PMT (Periodic Payment) = $0
Results:
FV = $4,142.43 ($1,600 + $2,542.43)
Total Interest = $2,542.43
Results:
N (# of periods) = 12 years
Sum of all periodic deposits = $4,800 ($1,600 x 2.914)
Thus, it will take about 12 years for the initial investment to grow to $4,000.
Learn more about investment periods at brainly.com/question/20392017
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