Question

Waiting period. Jamal is waiting to be a millionaire. He wants to know how long he must wait if a. he invests $27,511.28 at 18% today? b. he invests $53,802.38 at 13% today? c. he invests $121,474.01 at 10% today? d. he invests $323,335.15 at 5% today? a. How long will Jamal have to wait to become a millionaire if he invests $27,511.28 at 18% today? 21.71 years (Round to the nearest whole number.) b. How long will Jamal have to wait to become a millionaire if he invests $53,802.38 at 13% today? | years (Round to the nearest whole number.)

Answer 1

Present value = Future value/(1+i)^n

i = interest rate per period

n= number of periods

a)

n = ln(Future value/Present value)/ln(1+i)

= ln(1000000/27511.28)/ln(1+0.18)

= 21.71 years

b)

n = ln(1000000/53802.38)/ln(1+0.13)

= 23.91 years

c)

n =  ln(1000000/121474.01)/ln(1+0.1)

= 22.12 years

d)

n = ln(1000000/323335.15)/ln(1+0.05)

= 23.14 years