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Ilia_Sergeevich [38]
3 years ago
11

So you can retire early, you have decided to start saving $500 a month starting one month from now. You plan to retire as soon a

s you can accumulate $1 million. If you can earn 5 percent on your savings, how many years will it be before you can retire?
Business
1 answer:
Mashcka [7]3 years ago
8 0

Answer:

It will take him 45 years

Explanation:

In this question, we are asked to calculate the number of years it would take to accumulate $1,000,000 if there is a plan to save $500 per month at an interest rate of 5%.

To solve this, we use the following mathematical formula:

Future value of annuity = Annuity payment * {(1+r)^n - 1}/r

Where r is the monthly interest rate and n is the number of months it will take.

From the question, we can identify the following;

Since he earns 5% interest on savings, the actual monthly interest rate will be 5%/12 = 0.4167% = 0.004167

Annuity payment = monthly payment = $500

Future value of annuity = $1,000,000

We substitute these values into the equation:

1,000,000 = 500 * [(1+0.004167)^n - 1]/0.004167

8.334 = (1.004167)^n - 1

1+8.334 = (1.004167)^n

9.334 = (1.004167)^n

To get n, we simply take the log on both sides of the equation

Log 9.334= nLog 1.004167

n = Log9.334/Log1.004167

n = 537 months

Question asks to calculate in years

there are 12 months in a year. The number of years it will take will be 537/12 = 44.76 years and that’s approximately 45 years

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Answer:

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Explanation:

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5 0
3 years ago
A company issued a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interes
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Answer: $828

Explanation:

Given the following :

Semi-annual payment = $40

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Using the PV table:

PV at $1 (40, 5%) = 0.1420

PVA at $1 (40, 5%) = 17.159

[Par value * PV at $1 (40, 5%)] + [$40 * PVA at $1 (40, 5%)]

= ($1000 * 0.1420) + ($40 * 17.159)

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4 0
2 years ago
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The jou
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Expense on direct labor is provided for during the production by a debit to factory payroll expense and a credit to factory payroll payable.

As such, the journal entry will be a debit to factory payroll payable $160,000 and a credit to cash $160,000. This means cash will reduce by $160,000 as the factory workers are paid while payables which is a provision account will reduce as well on the cash book by the same amount.

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sarah has two dependent children who attend sun valley day care while she is at work. she will claim a $1,200 credit for child a
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If Sarah is in the income tax band that has a marginal rate of 24%, the amount of the deduction that must be taken in order to generate a tax advantage that is equivalent to that provided by the child care credit is x = 5000.

This is further explained below.

<h3> What amount of deduction is necessary to provide a tax benefit that is equal to that provided by the child care credit if Sarah is in the 24% marginal income tax bracket?</h3>

Generally, The proportion of an individual's income that must be paid in taxes is referred to as that person's marginal tax rate.

The average tax burden may be conceptualized as the entire tax burden expressed as a proportion of the income that is produced.

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In conclusion,

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6 0
1 year ago
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Answer:

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The correct term is operations research.  

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