document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=178315>Question 178315</A>This question is from textbook <A HREF=http://www.amazon.com/exec/obidos/ASIN/9780495389132/algebrahomeworkh>Math its Power and Utility</A><BR>\n" );
document.write( ": <I><SPAN STYLE=\"word-break: break-all;\"> Please help me, I have been trying to solve this for 2 days.  \r<BR>\n" );
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document.write( "Jerry has just received an inheritance of $50,000, and he would like to use it to help him with his retirement. Since Jerry is 25 years old, he figures that the $50,000 can be invested for 40 years before he will need to use it for retirement. Jerry wants to know what interest rate would be necessary for the $50,000 to grow to provide an amount so that he can have a monthly income of $4,000 earned from the interest only. Assume that Jerry is able to invest in real estate and can earn a 12% return on his investment.\r<BR>\n" );
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document.write( "I=Prt;  first I found out the amount Jerry would have after 40 years at 12% interest.\r<BR>\n" );
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document.write( "I=50000.00(.12)(40)<BR>\n" );
document.write( "I=240,000.00\r<BR>\n" );
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document.write( "Then I took the 240,000.00 and used the same formula: I=Prt\r<BR>\n" );
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document.write( "4000.00=240,000.00(r)(1/12)<BR>\n" );
document.write( "12*4000.=240,000.00(r)(1/12)*12<BR>\n" );
document.write( "48000.00=240,000.00r (divide both sides by 240,000.00<BR>\n" );
document.write( "I=.20 or 20%\r<BR>\n" );
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document.write( "I am doing this class online and so when I input the answer it tells me if the answer is correct or not.  I don't understand what I am doing wrong.  PLEASE HELP ME I AM DESPERATE AT THIS POINT!!!!  Thank you so much in advance!!  \r<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #133285 by </B><A HREF=/tutors/aboutme.mpl?userid=ankor@dixie-net.com><B>ankor@dixie-net.com(22740)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=ankor@dixie-net.com><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=ankor@dixie-net.com><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=133285\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Jerry has just received an inheritance of $50,000, and he would like to use it to help him with his retirement. Since Jerry is 25 years old, he figures that the $50,000 can be invested for 40 years before he will need to use it for retirement. Jerry wants to know what interest rate would be necessary for the $50,000 to grow to provide an amount so that he can have a monthly income of $4,000 earned from the interest only. Assume that Jerry is able to invest in real estate and can earn a 12% return on his investment.<BR>\n" );
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document.write( "I.m not sure what you are doing here, see if this makes sense to you<BR>\n" );
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document.write( "First find out how much required to produce $4000 a month interest at 12%<BR>\n" );
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document.write( "12% per yr is 1% per month so we have<BR>\n" );
document.write( "p*r*t = 4000<BR>\n" );
document.write( "t = 1<BR>\n" );
document.write( "r = .01<BR>\n" );
document.write( "find p<BR>\n" );
document.write( "p * .01 * 1 = <BR>\n" );
document.write( ".01p = 4000<BR>\n" );
document.write( "p = <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=4000%2F.01 ALIGN=MIDDLE  ALT=\"4000%2F.01\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "p = $400,000 will be the required amt<BR>\n" );
document.write( ";<BR>\n" );
document.write( "Now we want to find out what interest rate will produce $400,000 in 40 yrs<BR>\n" );
document.write( "with $50,000 initial investment. Assume it's compounded annually<BR>\n" );
document.write( "Ao(1+r)^t = A<BR>\n" );
document.write( "where<BR>\n" );
document.write( "A = final amt (400000)<BR>\n" );
document.write( "Ao = initial amt (50000)<BR>\n" );
document.write( "t = time (40 yrs)<BR>\n" );
document.write( "r = interest rate (decimal)<BR>\n" );
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document.write( "50000(1+r)^40 = 400000<BR>\n" );
document.write( "(1+r)^40 = <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=400000%2F50000 ALIGN=MIDDLE  ALT=\"400000%2F50000\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "(1+r)^40 = 8<BR>\n" );
document.write( "40*log(1+r) = log(8); log equiv of exponents<BR>\n" );
document.write( "40*log(1+r) = .90309<BR>\n" );
document.write( "log(1+r) = <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=.90309%2F40 ALIGN=MIDDLE  ALT=\".90309%2F40\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "log(1+r) = .022577<BR>\n" );
document.write( "Find the 10^x of each side<BR>\n" );
document.write( "1 + r = 1.05336<BR>\n" );
document.write( "r = 1.05336 - 1<BR>\n" );
document.write( "r = .05336 ~ 5.3% interest will produce $400,000 after 40 yrs compounded annually<BR>\n" );
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document.write( "Sorry I got i mixed up with r, hope it didn't confuse you. Carl </SPAN>\n" );
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