Your son is born today and you want to make him a millionaire by the time he is 50 years old.You deposit $10,700 in an investment account and want to know what annual interest rate must you earn in order to have the account value equal to $1,000,000 on your son's 50th birthday.

Question

Quizplus · Accepted Answer

To find the required annual interest rate, we use the future value formula for compound interest: FV = PV * (1 + r)^n. Here, FV is $1,000,000, PV is $10,700, n is 50 years. Solving for r gives approximately 9.5%.

Your Son Is Born Today and You Want to Make