Saturday, March 17, 2012

Annuities: Now you can actually solve them!

So now that we actually know how to solve an annuity problem, I figured the time may be ripe to ask another question about them. So......
A) If you were to start off by depositing 10,000 dollars your first year, and every year after that, and it earned 12% interest, how long would it be before you made it to 1 million dollars? What about 1.5 million dollars?
B) Now say you had the same situation, 10,000 dollars every year, but you didn't know the rate at which it was earning interest. What would the rate be if you reached the 1 million dollar plateau after 35 years?
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7 comments:

  1. EverMarch 19, 2012 at 8:07 PM

    For the first question in part A I got about 20 years as my answer!

    ReplyDelete
  2. EsmereldaMarch 21, 2012 at 2:47 PM

    For the first question in part A I got 21.2 years as my answer!

    ReplyDelete
  3. SEBMarch 21, 2012 at 8:20 PM

    For the 1st question I got 21.7 years for 1 million and 25 years for 1.5 million
    for the 2nd question I got 5.3% interest rate

    ReplyDelete
  4. Shawn W. & Ben B.March 21, 2012 at 10:21 PM

    A) 20.707, 24.086
    B) < 8%

    ReplyDelete
  5. Cheno SenMarch 22, 2012 at 12:01 PM

    In the first question in part A I got 21.2 years as my answer.

    ReplyDelete
  6. Nero DarkstarMarch 22, 2012 at 12:03 PM

    A) about 20 years, about 24 years.
    B)between 7%-8%

    ReplyDelete
  7. Brian BearssMarch 23, 2012 at 11:16 AM

    Thanks for the extra credit comments.

    ReplyDelete

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