Your goal in life is to be a millionaire. Today, your financial portfolio is worth $3,733.24....

Your goal in life is to be a millionaire. Today, your financial portfolio is worth $3,733.24. After extensive studying of the stock market and the nature of investments, you have determined that you can earn 15% every year on your portfolio. You do not plan to invest any additional money in this portfolio, nor will you withdraw any funds from it before it grows to $1 million. Given your 15% interest rate, how long will you have to wait to become a millionaire if this investment represents all your wealth?

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Expert Solution

n = [log(FV/PV)] / [log(1+r)]

= [log($1,000,000/$3,733.24)] / [log(1+0.15)]

= [log(267.8638)] / [log(1.15)]

= 5.5905 / 0.1398

= 40

So, it will take 40 years to become a millionaire.

jeff jeffy answered 2 years ago

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