How Long Will It Take for Faisal's Savings to Grow to $50,000?

Calculating the Time Needed for Faisal's Savings to Grow

Faisal's Initial Savings: $15,000

Additional Annual Savings: $4,500

Interest Rate: 12%

Target Savings Amount: $50,000

To calculate the time needed for Faisal's savings to reach $50,000, we will use the Present Value, Annual Savings, Interest Rate, and Future Value formula.

Present Value (Pv): $15,000

Annual Savings (Pmt): $4,500

Number of Payments/Year (P/yr): 1

Interest Rate (r): 12%

Future Value (Fv): $50,000

Using a financial calculator, we can input these values to find the time required for Faisal's savings to grow to $50,000. The calculated period is 4.50, which translates to 4 years and 6 months.

Therefore, it will take Faisal 4 years and 6 months to reach his savings goal of $50,000 with his current savings, annual contributions, and the given interest rate.