Homework Answers
Amount Invested each month = P = $100
Monthly interest Rate = r = 0.12/12 = 0.01
Let the number of months be n
Future Value required = FV = $1000000
Hence, FV = P(1+r)n-1 +....+ P(1+r)2 + P(1+r) + P = P[(1+r)n -1]/r
=> 1000000 = 100[(1+0.01)n -1]/0.01
=> (1+0.01)n = 1 + 1000000*0.01/100 = 101
=> n = ln(101) / ln (1.01) = 463.82
Hence, it will take 463.82 months for the account to reach $1000000
463.82 months = 463.81/12 = 38.65 years
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