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You're saving for retirement and hope to have $1,000,000 in 50 years. Your account earns 5% annual interest. How would you need to deposit now if the account earns simple interest? Show work!

Respuesta :

apologiabiology
I=PRT
I=interest
P=principal
R=rate
T=time in years

we want
I+P=1,000,000
I=PRT
R=5%=0.05
T=50

P(0.5)(50)+P=1,000,000
25P+P=1,000,000
26P=1,000,000
divide both sides by 26
P=38461.5384
round to tenth
P=$38,461.54

you would need to invest $38,461.54
xBOEITJOUNIKS
1.05^50=11.47% will be your interest over the years

1000000 = X x 11.47
1000000:11.47= 87,183.96

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