Consider the following independent situations. (Use the tables below.) Mike Finl

Question

Consider the following independent situations. (Use the tables below.) Mike Finley wishes to become a millionaire. His money market fund has a balance of $317,283 and has a guaranteed interest rate of 11%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000? years Assume that Sally Williams desires to accumulate $1 million in 19 years using her money market fund balance of $194,490. At what interest rate must Sally's investment compound annually? (Round answer to O decimal places, e.g. 5%.) Interest rate % Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

1- t = log(A/P) / n[log(1 + r/n)]

t= log(1000000/317283) / 1[log(1+.11/1)]

log(3.146) / 1[log(1.11/1)]

T = 11%

2- r = n[(A/P)1/nt - 1]

r= 1[1000000/194490)^1/1*19 -1]

=9%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.