Answer:
Therefore the required time period is 3 years.
Explanation:
To calculate the number of period we are using the following formula of future value
Future value = [tex]C_0(1+r)^n[/tex]
[tex]C_0[/tex] is cash flow at period 0= $ 35,00
r = rate of interest = 8.00% = 0.08
n= number of periods = ?
Future value = $44,089.92
Substituting the values in the formula
[tex]44,089.92= 35,000(1+0.08)^n[/tex]
[tex]\Rightarrow (1+0.08)^n=\frac{44089.92}{35000}[/tex]
[tex]\Rightarrow(1.08)^n = 1.259712[/tex]
[tex]\Rightarrow (1.08)^n=(1.08)^3[/tex]
[tex]\therefore n= 3[/tex]
Therefore the required time period is 3 years.
