solve for t = present value

tultul_gis

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Joined
Feb 11, 2011
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i got the answer of 59. not sure whether i am right or wrong? and also wondering is it going to be 56 months or 56 year?

Ottawa Manor would like to buy some additional land and build a new assisted living center. The
anticipated total cost is $12.4 million. The CEO of the firm is quite conservative and will only do this
when the company has sufficient funds to pay cash for the entire construction project. Management has
decided to save $235,000 a month for this purpose. The firm earns 7 percent compounded monthly on
the funds it saves. How long does the company have to wait before expanding its operations?
 
tultul_gis said:
i got the answer of 59. not sure whether i am right or wrong? and also wondering is it going to be 56 months or 56 year?

Ottawa Manor would like to buy some additional land and build a new assisted living center. The
anticipated total cost is $12.4 million. The CEO of the firm is quite conservative and will only do this
when the company has sufficient funds to pay cash for the entire construction project. Management has
decided to save $235,000 a month for this purpose. The firm earns 7 percent compounded monthly on
the funds it saves. How long does the company have to wait before expanding its operations?

sorry mistakes: 59 months or 59 years??
 
tultul_gis said:
i got the answer of 59. not sure whether i am right or wrong? and also wondering is it going to be 56 months or 56 year?
56 years?! 56 * 12 * 235000 = 157,920,000

Answer is slightly over 46 MONTHS...
Ask your teacher/whoever for help: you're obviously not ready for this...
 
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