Problema Solution
sarah wiggum would like to make a single investment and have $2 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4 percent annually, how much will Sarah have to invest today?
Answer provided by our tutors
A = $2,000,000.00 the future value
t = 35 years
r = 0.04 or 4% the annual rate
P = the principal
A = P(1 + r)^t
P = A/((1 + r)^t)
P = 2,000,000/((1 + 0.04)^35)
P = $506,830.942
click here to see the step by step calculation
Sara will have to invest $506,830.942 today.