SOLUTION: You have just received $115,000 from the estate of a long-lost rich uncle. If you invest all your inheritance in a tax-free bond fund earning 6.6% compounded quarterly, how long do
Algebra ->
Probability-and-statistics
-> SOLUTION: You have just received $115,000 from the estate of a long-lost rich uncle. If you invest all your inheritance in a tax-free bond fund earning 6.6% compounded quarterly, how long do
Log On
Question 892625: You have just received $115,000 from the estate of a long-lost rich uncle. If you invest all your inheritance in a tax-free bond fund earning 6.6% compounded quarterly, how long do you have to wait to become a millionaire? Answer by nerdybill(7384) (Show Source):
You can put this solution on YOUR website! You have just received $115,000 from the estate of a long-lost rich uncle. If you invest all your inheritance in a tax-free bond fund earning 6.6% compounded quarterly, how long do you have to wait to become a millionaire?
.
"Compound interest" formula:
A = P(1 + r/n)^(nt)
The problem gives you:
A is 1000000
P is 115000
r is .066
n is 4
t is what we're looking for
.
1000000 = 115000(1 + .066/4)^(4t)
1000 = 115(1 + 0.0165)^(4t)
1000 = 115(1.0165)^(4t)
1000 = 115(1.0165)^(4t)
8.6956522 = (1.0165)^(4t) = 4t
136.254998 = 4t
34.06 years = t
