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You plan on saving $500 per week at an interest rate of 12% compounded weekly. Calculate...

You plan on saving $500 per week at an interest rate of 12% compounded weekly. Calculate the number of years that it will take you to accumulate 1 million dollars?

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Answer #1

Sol:

Weekly saving (PMT) = $500

Interest rate = 12%, Compounded weekly = 12% / 52 = 0.2308%

Future value (FV) = $1,000,000

Period (NPER)

To compute number of years it will take to accumulate the desired amount we can use NPER function in excel:

FV

1,000,000

Weekly saving

-500

Interest rate

0.2308%

No of weeks

748.58

No of years

14.40

Therefore it will take approx 14.40 years to accumulate 1 million dollars.

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