Answer:
1. Let amount deposited now be P.
So P*(1.1106^44) = 1,000,000, which means P=9896.06
2. Let amount deposited now be P.
So P*(1.0553^44) = 1,000,000, which means P=93639.42
Step-by-step explanation:
Answer:
Step-by-step explanation:
Let P represent the amount that you need to invest today. Thus, principal = $P
The return would be compounded annually. So
n = 1
The rate at which the principal would be compounded is 11.06%. So
r = 11.06/100 = 0.1106
The investment would be for 44 years. So
t = 44
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of t years.
A = $1000000
Therefore
1000000 = P(1+0.1106/1)^1×44
1000000 = P(1.1106)^44
P = 1000000/101.05
P = $9896.1
2) if you can earn an annual return of 5.53 percent, then
r = 5.53/100 = 0.053
1000000 = P(1+0.53/1)^1×44
1000000 = P(1.053)^44
P = 1000000/9.7
P = $103093
