SOLUTION: Present Value Determine the amount of money, to the nearest dollar, you must invest at 5% per year, compounded annually, so that you will be a millionaire in 27 years. $ _____

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Question 1205191: Present Value Determine the amount of money, to the nearest dollar, you must invest at 5% per year, compounded annually, so that you will be a millionaire in 27 years.
$ _____
Answer by ikleyn(52781)   (Show Source): You can put this solution on YOUR website!
.

Write your governing equation to become a millionaire with the exponentially growing account


    1,000,000 =  = .


From this equation, find the initial amount to deposit

    x =  = 267848.32.


Round it to the closest greater dollar to get the 


ANSWER.  $267849.


CHECK.   = 1000002.54.   ! very good;  extremely nice !

Solved.

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For all details and explanations,  look into these two lessons
    - Compounded interest percentage problems
    - Problems on discretely compound accounts
in this site,  and learn the subject from there.

After reading these lessons,  you will tackle such problems on your own without asking for help from outside.



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