A company that manufactures ultrasonic wind sen­sors invested $1.5 million 2 years ago to acquire part-ownership in an innovative chip-making com­pany. How long will it take from the date of their initial investment for their share of the chip-making company to be worth $6 million, if that company is growing at a rate of 25% per year?

What will be an ideal response?


1,500,000 = 6,000,000(P/F,25%,n)
(P/F,25%,n) = 0.2500

From 25% table, n is between 6 and 7 years; therefore, n = 7 years

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