To calculate:
The number of years to earn one million on investing $250,000 in diversified equity portfolio returning 8 percent per year.
Introduction:
The diversified equity portfolio can be referred to the collection of number of equity shares from different companies. The portfolio is made up of different equity shares which provides different
Answer to Problem 1PA
Solution:
The number of years to earn $1,000,000 by investing $250,000 in diversified equity portfolio returning 8% is 18.012 years.
Explanation of Solution
Given,
Investment in the diversified equity portfolio is $250,000.
Required return from investment is $1,000,000.
The calculation of number of years on spreadsheet is,
Particulars | Amount ($) |
1,000,000 | |
250,000 | |
Rate of Interest (%) | 0.08 |
Number of Years | 18.01293668 |
Table (1)
The number of years is 18.012 years.
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