Question
You have $50,000 in savings for retirement in an investment earning 9% annually. You aspire to have $1,000,000 in savings when you retire. Assuming you add no more to your savings, how many years will it take to reach your goal? Please round your answer to the nearest hundredth. Note that the HP 12c financial calculator rounds up the periods result to the next integer and will not give the correct answer to the nearest hundredth. Therefore, you should use Excel or a financial calculator that does provide decimal precision to the number of periods.
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Answer to a math question You have $50,000 in savings for retirement in an investment earning 9% annually. You aspire to have $1,000,000 in savings when you retire. Assuming you add no more to your savings, how many years will it take to reach your goal? Please round your answer to the nearest hundredth. Note that the HP 12c financial calculator rounds up the periods result to the next integer and will not give the correct answer to the nearest hundredth. Therefore, you should use Excel or a financial calculator that does provide decimal precision to the number of periods.
Eliseo
4.6109 Answers
To calculate the number of years needed to reach the savings goal, we can use the future value formula for compound interest:
FV = PV \times (1 + r)^n
where:
-FV
-PV
-r
-n
Plugging in the given values, we have:
\50,000 \times (1 + 0.09)^n
20 = (1.09)^n
To solve forn
n = \frac{{\ln(20)}}{{\ln(1.09)}}
n\approx34.76
Therefore, it will take approximately 34.76 years to reach $1,000,000 in savings, rounded to the nearest hundredth.
where:
-
-
-
-
Plugging in the given values, we have:
To solve for
Therefore, it will take approximately 34.76 years to reach $1,000,000 in savings, rounded to the nearest hundredth.
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