You have decided that you want to be a millionaire when you retire in 44 years. If you can earn an annual return of 11.06 percen

Question

3 years ago

7

t, how much do you have to invest today? What if you can earn an annual return of 5.53 percent?

2 answers:

Vera_Pavlovna [14] · Answer 1 · 2022-04-24T20:00:16+03:00

Answer:

Step-by-step explanation:

Let P represent the amount that you need to invest today. Thus, principal = $P

The return would be compounded annually. So

n = 1

The rate at which the principal would be compounded is 11.06%. So

r = 11.06/100 = 0.1106

The investment would be for 44 years. So

t = 44

The formula for compound interest is

A = P(1+r/n)^nt

A = total amount in the account at the end of t years.

A = $1000000

Therefore

1000000 = P(1+0.1106/1)^1×44

1000000 = P(1.1106)^44

P = 1000000/101.05

P = $9896.1

2) if you can earn an annual return of 5.53 percent, then

r = 5.53/100 = 0.053

1000000 = P(1+0.53/1)^1×44

1000000 = P(1.053)^44

P = 1000000/9.7

P = $103093

igomit [66] · Answer 2 · 2022-04-24T18:24:58+03:00

5 0

Answer:

1. Let amount deposited now be P.

So P*(1.1106^44) = 1,000,000, which means P=9896.06

2. Let amount deposited now be P.

So P*(1.0553^44) = 1,000,000, which means P=93639.42

Step-by-step explanation: