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Sagot :
Answer:
16 years
Step-by-step explanation:
Let us assume that he would received the first payment after t years
So
The following formula should be used
PV = P ÷ (1 + r)^t + P ÷ (1 + r)^t+5
$2,606 = $2,500 ÷ (1 + 0.05)^t + $2,500 ÷ (1 + 0.05)^t + 5
$2,606 = $2,500 ÷ 1.05^t (1 + 1 ÷ (1.05)^5)
1.05^t = $2,500 ÷ $2,606 (1.7835) = 1.71098
t = ln(1.71098) ÷ ln(1.05)
= 11
Therefore he would be received the second payment after
= 11 + 5
= 16 years
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