Newman Finley wishes to become a millionaire. His money market fund has a balance of $296,375 and has a guaranteed interest rate of 6%. How many years must Newman leave that balance in the fund in order to get his desired $1,200,000?

Investment period = 24 years

Explanation:

The total amount that an investment made today would become if invested at a particular rate for certain number of years is known as the future value.

The $1,200,000 is the desired future value, the $296, 375 is the present value and the 6% is the interest rate.

FV = PV * (1+r) ^n

1,200,000 = 296,375 * (1.06) ^ (n)

(1.06) ^ (n) = 1200000/96,375

(1.06) ^ (n) = 4.048924504

find the log of both sides

n log 1.06 = log 4.048924504

n = log 4.048924504/log 1.06

n = 24

It will take 24 years