Question

You have $50,000 in savings for retirement in an investment earning a stated annual rate of...

You have $50,000 in savings for retirement in an investment earning a stated annual rate of 12% compounded monthly. You aspire to have $1,000,000 in savings when you retire. Assuming you add no more to your savings, how many years will it take to reach your goal? Please round your answer to the nearest hundredth. Note that the HP 12c financial calculator rounds up the periods result to the next integer and will not give the correct answer to the nearest hundredth. Therefore, you should use Excel or a financial calculator that does provide decimal precision to the number of periods

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Answer #1


Effective rate = (1+12%/12)^12 -1 = 12.68250%

Using financial calculator BA II Plus - Input details:

#

FV = Future Value =

-$1,000,000.00

PV = Present Value =

$50,000.00

I/Y = Rate / Frequency = Effective rate in non-percentage form =

12.68250

PMT = Payment / frequency =

CPT > N = Total number of period in years =

                 25.09
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