Use the formula for present value of money to calculate the amount you need to invest now in one lump sum in ordine to have 1,000,000 after 40 years with an APR of 9% compounded quarterly. Round your answer to the nearest cent, if necessary.

Soluzione

U se t h e f or m u l a f or p rese n t v a l u e o f m o n ey t o c a l c u l a t e t h e am o u n t yo u n ee d t o in v es t n o w in o n e l u m p s u m in or d er t o ha v e 1, 000, 000 a f t er 40 ye a rs w i t h an A PR o f 9% co m p o u n d e d q u a r t er l y . R o u n d yo u r an s w er t o t h e n e a res t ce n t, i f n ecess a ry .

Amount : 35.17

Fasi della soluzione

Translate the problem into an equation:

A = 1 \cdot (1 + \frac{0.09}{4})^{4 \cdot 40}

1 \cdot (1 + \frac{0.09}{4})^{4 \cdot 40} = 35.16662 \dots

Arrotondare all' hundredth più vicino:

35.17

Amount : 35.17