Question

Problem 5.26 You have just inherited $570,000. 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 5.64 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.) Inheritance will be worth $1 million in years

Answer 1

FV = PV x [1 + r]ⁿ

$1,000,000 = $570,000 x [1.0564]ⁿ

1.7544 = [1.0564]ⁿ

ln[1.7544] = n x ln[1.0564]

0.5621 = n x 0.0549

n = 10.25