Ask Question
30 December, 01:29

You have just inherited $580,000. You plan to save this money and continue to live off the money that you are earning in your current job. If you can invest the money in a bond that pays 4.71 percent interest annually, how long will it be before your inheritance is worth $1 million? (If you solve this problem with algebra round intermediate calculations to 5 decimal places, in all cases round your final answer to 2 decimal places, e. g. 8.72.)

+2
Answers (1)
  1. 30 December, 01:44
    0
    11.86 years

    Step-by-step explanation:

    Given:

    Amount inherited = $580,000

    Interest paid annually, r = 4.71%

    Future value = $1 million = $1,000,000

    Now,

    Future value = Principle * (1 + r) ⁿ

    here n is the number of years

    thus,

    $1,000,000 = $580,000 * (1 + 0.0471) ⁿ

    or

    1.724 = (1.0471) ⁿ

    taking log both sides, we get

    0.236 = n * 0.0199

    or

    n = 11.859 ≈ 11.86 years

    Hence, it will take around 11.86 years
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You have just inherited $580,000. You plan to save this money and continue to live off the money that you are earning in your current job. ...” in 📗 Mathematics if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers