question archive ulasi 3 How long it takes to have 1 million in your account if you deposit $ 16,250 per ?year at 10% per year ????? Find the present worth of 20 uniform deposits of $10,000 every 2 years
ulasi 3 How long it takes to have 1 million in your account if you deposit $ 16,250 per ?year at 10% per year ????? Find the present worth of 20 uniform deposits of $10,000 every 2 years
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ulasi 3 How long it takes to have 1 million in your account if you deposit $ 16,250 per ?year at 10% per year ????? Find the present worth of 20 uniform deposits of $10,000 every 2 years .starting at year 2 at an interest rate of 10% per year ?????
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To get $1 million , let no of years required be n
So, Future value of annuity of $16250 = $1 million
=> 16250/0.1*(1.1^n-1) = 1000000
=> 1.1^n-1 = 6.153846
n = ln (7.153846)/ln(1.1) =20.6447
So, it takes a little more than 20 years or about 21 years (exactly 20.6447 years) to have $1 million in your account
Present worth = 10000/1.1^2+10000/1.1^4+......+10000/1.1^40 (20 terms)
= 10000/1.1^2*(1-(1/1.1^2)^20)/(1-1/1.1^2) applying sum of GP formula
=$46566.91
