Question

Other Compounding Periods 29. When you retire, you wish to have $1 million in your retirement account. You decided to add $1,000 every month to your retirement account and invest to generate annualized return of 8% from your investment, how many years do you think it will take to have $1 million in the account? a. 25.5 30. When you retire, you wish to have $1 million in your retirement account. You decided to add $1,000 every quarter to your retirement account and invest to generate annualized return of 8% from your investment, how many years do you think it will take to have $1 million in the account? a. 38.4

Answer 1

29)

Function Arguments ? X NPER = 0.006666667 1 1 = -1000 Rate 8%/12 Pmt -1000 Pv0 FV 1000000 1 1 = 1000000 = 0 Type o = 306.5496022 Returns the number of periods for an investment based on periodic, constant payments and a constant interest rate. Type is a logical value: payment at the beginning of the period = 1; payment at the end of the period = 0 or omitted. Formula result = 306.55 Help on this function | OK Cancel

Hence, It will take 25.5 years (306.55/12)

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