Ask Question
6 December, 08:55

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.)

+1
Answers (1)
  1. 6 December, 09:33
    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 you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers