SOLUTION: A company establishes a sinking fund for upgrading office equipment with monthly payments of 2000 into an account paying 6.6% compounded monthly.How long will it be before the acc

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Question 1131417: A company establishes a sinking fund for upgrading office equipment with monthly payments of 2000 into an account paying 6.6% compounded monthly.How long will it be before the account has 100000
Answer by greenestamps(13200) About Me  (Show Source):
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Standard sinking fund (future value annuity) problem; unknown is an exponent, so solution requires logarithms, or a graphing calculator.

payment amount: 2000
future value: 100000
periodic interest rate: .066/12 = .0055
number of periods: x

100000+=+2000%28%28%281.0055%29%5Ex-1%29%2F.055%29
50+=+%28%28%281.0055%29%5Ex-1%29%2F.055%29
%281.0055%29%5Ex-1+=+50%28.055%29+=+.275
1.0055%5Ex+=+1.275
x%2Alog%281.0055%29+=+log%281.275%29
x+=+log%281.275%29%2Flog%281.0055%29+=+44.29 to 2 decimal places

ANSWER: It will take 45 months for the account to reach (more than) 100000.