Glen wants to take a holiday that costs $8,850, but currently he only has $2,750 saved. If he invests this money at 8 percent interest compounded annually, how long will he have to wait to take his holiday? Use a financial calculator to make the calculation.
A) 12.36 years
B) 16.25 years
C) 15.19 years
D) 13.52 years
E) 14.12 years

Question

Quizplus · Accepted Answer

Using the financial calculator, we can calculate the time it will take for Glen's savings to grow to $8,850 at 8% interest as follows:
- N = the number of years
- PV = present value = -$2,750 (since this is money that Glen currently owes)
- FV = future value = $8,850
- I/Y = interest rate = 8%
Solving for N, we get N = 15.19 years. Therefore, the best choice is C, which is the closest option to this calculation.

Glen Wants to Take a Holiday That Costs $8,850, but Currently