How long does it take to become a millionaire? A $500,000 investment will hit $1 million in 41 years at an annual interest rate of 1.70%. How long will it take to become a millionaire if the annual interest rate increases to 2.34%? You can get to your goal in years when i=2.34%. (Round to the nearest whole number.) C
How long does it take to become a millionaire? A $500,000 investment will hit $1 million in 41 years at an annual interest rate of 1.70%. How long will it take to become a millionaire if the annual interest rate increases to 2.34%? You can get to your goal in years when i=2.34%. (Round to the nearest whole number.) C
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:How long does it take to become a millionaire? A $500,000 investment will hit $1 million in 41 years at an annual interest rate of 1.70%. How long will it take to become a millionaire if the annual interest rate increases to 2.34%?
You can get to your goal in years when i=2.34%. (Round to the nearest whole number.)
B
Expert Solution

Step 1
The number of periods can be computed based on future value (FV) and present value (PV). The formula on computing for number of periods may i.e. solving for n, originates from formulas of the present value and future value wherein the variable n denotes the number of periods. FV = PV (1 + interest rate)n
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