Jax Coolidge invested $58,830 today and will earn 8% on his investment.At the end of the investment's life, Jax will receive $160,000.How many years will Jax wait to receive $160,000? Use appendix Table 1, Table 2, Table 3 and Table 4.

Question

Quizplus · Accepted Answer

Using Table 1, we find the present value interest factor (PVIF) for 8% and an unknown number of years to be 0.46319. 
We can then set up the equation: 
$58,830 x 0.46319 = $27,257.55, which represents the present value of the investment when Jax makes the initial investment. 
Using Table 2, we can find the future value interest factor (FVIF) for 8% and an unknown number of years to be 2.15893. 
We can then set up the equation:
$27,257.55 x 2.15893 = $58,830, which represents the future value of the investment at the end of the investment term. 
Since Jax will receive $160,000 at the end of the investment's life, we can solve for the number of years using Table 3: 
$160,000 / $58,830 = 2.7198. 
However, since Table 3 only goes up to 2.5 years, we need to use Table 4 to find the additional fraction: 
(2.7198 - 2.5) / 0.25 = 0.8792. 
Adding the fractional portion to 2.5, we get:
2.5 + 0.8792 = 3.3792 years. 
Rounding to the nearest whole year, we get the answer of 3 years.

Jax Coolidge Invested $58,830 Today and Will Earn 8% on His