SOLUTION: How long will it take to earn your first million dollars if you annually invest $1000 into an IRA at 10% interest compounded monthly.
This answer should be calculated using logar
Question 967716: How long will it take to earn your first million dollars if you annually invest $1000 into an IRA at 10% interest compounded monthly.
This answer should be calculated using logarithms so that the answer is exact. Found 2 solutions by MathLover1, MathTherapy:Answer by MathLover1(20850) (Show Source): You can put this solution on YOUR website!
To calculate this value exactly, a fairly simple formula can be utilized.
=principal () =annual nominal interest rate () =number of compounding during year (, because of months) =number of years (unknown) =amount after years (first )
This formula yields results when we have the time known, but in this case we need to isolate "" for the time necessary for the principal to turn into $. So we need to rearrange the formula into a fairly complex logarithmic formula:
Then substitute the numbers into the equation -
Finally we got the answer - it'll take about years and a four months!!!
Answer by MathTherapy(10555) (Show Source): You can put this solution on YOUR website! How long will it take to earn your first million dollars if you annually invest $1000 into an IRA at 10% interest compounded monthly.
This answer should be calculated using logarithms so that the answer is exact.
Use Future Value of Ordinary Annuity formula: ------ Cross-multiplying ---------- Exponential form -------- Logarithmic form ---------- Applying change of base years ------ EXACT TIME years ------------ APPROXIMATE TIME