Question

Your mother just received a ​$340 comma 461 inheritance. If she invests her money in a diversified equity portfolio returning 8 percent per​ year, approximately how long will it take her to become a​ millionaire?

Answer 1

Answer:

time period is 14.17 years

Explanation:

given data

principal P =  ​$340,461

future value FV  = $1000000

rate r = 8%  = 0.08

to find out

time period t

solution

we will apply here future value formula that is

future value = principal × $(1+rate)^{t}$   ..........................1

put here value and we get

$1000000  = $340,461  × $(1+0.08)^{t}$  

2.9371 = $(1.08)^{t}$

take ln both side

ln 2.9371 = t ln(1.08)

1.077 = t × 0.076

t = 14.17

so time period is 14.17 years