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How much would you need to invest at 8.75% interest rate compounded daily for 50 years to have $1,000,000 at the end of that time period?

Respuesta :

mhanifa

Answer:

  • You would need to invest $12594.78

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Given:

  • Interest rate r = 8.75% or 0.0875,
  • Time t = 50 years,
  • Compound number n = 365,
  • Future amount A = $1000000

Find the invested amount P using compound interest equation:

  • [tex]A=P(1+r/n)^{nt}[/tex]

Substitute to get:

  • [tex]1000000=P(1+0.0875/365)^{365*50}[/tex]
  • [tex]1000000=P(79.398)[/tex]
  • [tex]P=1000000/79.398[/tex]
  • [tex]P=12594.78[/tex]

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