Question 917282: Determine the amount of money, to the nearest dollar, you must invest at 7% per year, compounded annually, so that you will be a millionaire in 28 years.
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! Determine the amount of money, to the nearest dollar, you must invest at 7% per year, compounded annually, so that you will be a millionaire in 28 years.
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Compound Interest Formula: A=P(1+r/n)^nt,P=initial investment,r=interest,n=number of compounding periods/year, t=number of years, A=amount after t-years
..
For given problem:
P=to solve
r=7%
n=1
t=28
A=1000000
..
1000000=P(1+.07/1)^1*28
1000000=P(1.07)^28
P=1000000/(1.07)^28
P=15040
amount you must invest=$15,040
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