SOLUTION: What sum of money invested at 10% compounded semiannually will grow to $1, 000, 000 in 100 years? Round the result to two decimal places.

Algebra ->  Exponential-and-logarithmic-functions -> SOLUTION: What sum of money invested at 10% compounded semiannually will grow to $1, 000, 000 in 100 years? Round the result to two decimal places.       Log On


   



Question 1037912: What sum of money invested at 10% compounded semiannually will grow to $1, 000, 000 in 100
years? Round the result to two decimal places.

Answer by addingup(3677) About Me  (Show Source):
You can put this solution on YOUR website!
A = final amount
P = Principal, the sum of money originally invested
r = rate, the interest rate
n = number of compounding periods, in your problem this is 2
t = time, the number of years, in your problem 100
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A = P(1+r/n)^nt
1,000,000 = P(1+0.10/2)^2*100
1,000,000 = P(1.05)^200
1,000,000 = P*17,292.58 divide both sides by 17,292.58
P = 1.000.000/17.292.58 = 57.83
This problem is to teach you the power of compounding.