Question

Suppose that you want to have $1,000,000. so, you invest an initial $15,000 today which pays an annual compounding rate of 9%. also, you make annual payments of $1,000. how long will it take to get the $1,000,000?

Answer 1

To awnser this , you first need to discover how much is 9% of 15000 that you invested.
To discover that you can just divide by 100 and multiply by 9
15000 ÷ 100 = 150
150 × 9 = 1350
So each year he earns $1350 but he has $1000 annual payments , so he only profit $350 a year.
Now to discover how long it will take to achieve $1.000.000 back you can just take the the $15.000 he needs to have 1.000.000 and divide by how much he profit each year
15000÷350= 42.85
which means it will take approximately 42 years and 10 months to achieve $1.000.000