Question

7. You decide you want your child to be a millionaire.
You have a son today and every year

you deposit RM14,798 in an investment account that earns 9% per
year. The money in

the account will be distributed to your son whenever the total
reaches RM5,000,000. How

old will your son be when he gets the money (rounded to the nearest
year)?

Answer #1

Solution :-

Annual Deposit (A) = $14,798

Future Value of Annuity ( FV) = $5,000,000

Rate of Return (r) = 9%

Time Required (n) = ?? ( We need to find )

= $5,000,000 = $14,798 * FVAF ( 9% , n )

= $5,000,000 = $14,798 * [ ( 1 + 0.09 )^{n} - 1 ] /
0.09

= 337.8835 = [ ( 1 + 0.09 )^{n} - 1 ] / 0.09

= [ ( 1 + 0.09 )^{n} - 1 ] = 30.4095

( 1 + 0.09 )^{n} = 31.4095

Take log Both Sides

n log ( 1.09 ) = log ( 31.4095 )

n = 40

Therefore the age of son is 40 Years when he gets money

If there is any doubt please ask in comments

Thank you please rate

A financial advisor tells you that you can make your child a
millionaire if you just start saving early. You decide to put an
equal amount each year into an investment account that earns 7.55
interest per year, starting on the day your child is born. How much
would you need to invest each year (rounded to the nearest dollar)
to accumulate a million for your child by the time he/she is 35
years old? (your last deposit will be...

Your daughter is born today and you want her to be a millionaire
by the time she is 35 years old. open an investment account that
promises to pay 12% per year. How much money must you deposit today
so your daughter will have $1,000,000 by her 35th birthday?

Today, you turn 21. Your birthday wish is that you will be a
millionaire by your 40th birthday. In an attempt to reach this
goal, you decide to save $25 a day, every day until you turn 40.
You open an investment account and deposit your first $25 today.
What rate of return must you earn to achieve your goal?
15.07%
15.13%
15.17%
15.20%
15.24%

Today, you turn 21. Your birthday wish is that you will be a
millionaire by your 40th birthday. In an attempt to reach this
goal, you decide to save $75 a day, every day, until you turn 40.
You open an investment account and deposit your first $75 today.
What rate of return must you earn to achieve your goal? Note:
Ignore Leap Years. Use TVM function on financial calculator to
solve problem (N, I/Y, PV, PMT, FV)

You want to be a millionaire.
You will like to accomplish this goal in twenty years.
If you deposit money on a monthly basis and earn 12 percent per
year, how much should you deposit every month (assuming the first
payment is made at the end of the month)?

Option 1: Suppose you want to be a millionaire
before you retire at age 50. How could you reach that goal? This is
the question, John, an 18 years old college student, is faced with
as he plans his future. Here are his options.
(Hit: Deposit a one time lump sum into an investment account and
let it sit for 32 years.)
i) Assuming that the investment
account earned 9.8% interest, compounded monthly, how much would
John have to deposit...

suppose you are 21 now and you decide you want to become a
millionaire when you turn 65 years old.
A) To reach your goal, how much should you invest today,
assuming you can earn an average annual rate of return of 10% from
investing in the stock market?
B) To reach your goal, how much should you invest each year,
assuming you can earn an average annual rate of return of 10% from
investing in the stock market?
I...

How much would you have to deposit today if you want to have
$1,000 in five years and the annual interest rate is 5%?
You plan to buy a house today for $220,000. If the real estate
in your area is expected to increase in value by 2% each year, what
will be the approximate value of your house in 7 years?
How much would you have to deposit today to be able to withdraw
$500 each year for the...

You value education and you want your child to receive the best
possible education. But sending a child to private schools and Ivy
League colleges is not cheap. You want to start saving money so
that when you child need the money, you can support him/her. The
current assumption is you will have your 1st child in 5 years and
you wish to have $200,000 in today’s dollars when he/she is 15
years old. Based on current situation, you expect...

15 years from now, your 2-year old son will be attending
Harvard. You have determined he will need $70,000 per year for
tuition and living expenses. In 15 years, you will give him a lump
sum payment for the entire amount he will need, assuming that he
will be able to invest the money not yet needed at 5% interest. You
have found an investment opportunity that will yield an annual
return of 7% on your monthly payments. How much...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 8 minutes ago

asked 16 minutes ago

asked 16 minutes ago

asked 17 minutes ago

asked 27 minutes ago

asked 27 minutes ago

asked 28 minutes ago

asked 31 minutes ago

asked 34 minutes ago

asked 37 minutes ago

asked 39 minutes ago