You have just inherited $590,000. You plan to save this money and continue to live off the money that you are earning in your current job.

You have just inherited $590,000. You plan to save this money and continue to live off the money that you are earning in your current job. If you can invest the money in a bond that pays 4.03 percent interest annually, how long will it be before your inheritance is worth $1 million? (If you solve this problem with algebra round intermediate calculations to 5 decimal places, in all cases round your final answer to 2 decimal places, e.g. 8.72.)

Inheritance will be worth $1 million in

years

Expert Solution

Present value (PV)= $590,000

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

Interest rate= yield to maturity (I/Y)= 4.03%

The time for my inheritance is worth $1 million is calculated by entering the below information in a financial calculation:

PV= -590,000

FV= 1,000,000

I/Y= 4.03

Press the CPT key and N to compute the time for my inheritance is worth $1 million.

The value obtained is 13.3547.

Therefore, it takes 13.35 years for my inheritance is worth $1 million.

jeff jeffy answered 2 years ago

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