I was given a portfolio during class that had me solve three problems. These three problems were about three people who wanted to be millionaires by the time they each turned
65. The three peoples names are Alex, Marty, and Sam. Each one of them has a different plan that includes how old they are and what their plan is for becoming a millionaire. What I have to do is figure out what the percent annual interest would be so they can reach 1,000,000 dollars based off of their plans. I then need to determine which of the three has the best plan, which is the one with the lowest interest needed.
The first plan is Alex’s. He is 18 and he inherited 30,000 dollars. Alex plans to leave the money in the bank while he sits back and waits to collect his 1,000,000 dollars when he turns
65. I had to find out how many months it would be when he turns 65. I figured out that it would be in 564 months. When I was putting data into the calculator, I put in random amounts to multiply by Un1. After slowly getting closer and closer I was able to determine that the interest would be 7.484002525%. The information in the calculator looked like this,
U(n)=U(n1)(1+.07484002525/12)
The next plan was Marty’s. He is 28 and he plans to put 250 dollars into the bank every month. He doesn’t have any money to start off of so it starts at zero. He will be 65 in exactly 444 months. I had to repeat the same process that I did before. After putting in random numbers for a while, I finally came up with 9.444086164% The data on the calculator looked like this,
U(n)=U(n1)(1+.09444086164/12)+250. This is the answer when nMin=0. Thats the same for
