Calculating the number of months required (n):
FV of annuity=P×[r(1+r)n−1]
1,000,000=3,745.35×[(120.1451+120.145)n−1]
3,745.351,000,000×0.012083=(1.012083)n−1
3.226223+1==(1.012083)n ( now flip the equation and take log both sides)
n×log(1.012083)=log(4.226223)
n=log(1.012083)log(4.226223)
n=119.99
Where:
the future value of annuity = 1,000,000
the monthly payment (P) = 3,745.35
the monthly inteest rate =120.145
Thus, the given annuity will take 119.99 months, i.e., 120 months rounded off, or 10 years to achieve 1,000,000.00.
10 years
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