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You are entitled to receive the following payments. Unless stated otherwise, assume the annual compounding in each

question. Use the information below to answer the following question:  Suppose as soon as you receive the third payment at year 10, you place the funds in a bank account that earns 2% interest. Which of the following comes closest to the amount of time it'll take for this account to grow to $480?

 

First Payment: $98 today

Second Payment: $170 to be received at the end of year 5

Third Payment: $400 to be received at the end of year 10

7.4 years

5.8 years

9.2 years

8.5 years

6.4 years

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