Question

1. In 20 years, you’d like to have $500,000 to buy a vacation home. You currently have $50,000. At what rate must your $50K be compounded (assuming no additional contributions) for it to grow to $500,000 in 20 years?

          1. In 20 years, you’d like to have $500,000 to buy a vacation home. You currently have $50,000. At what rate must your $50K be compounded (assuming no additional contributions) for it to grow to $500,000 in 20 years?
        

Added by Michael G.

Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
AceChat toggle button
Close icon
Ace pointing down

Please give Ace some feedback

Your feedback will help us improve your experience

Thumb up icon Thumb down icon
Thanks for your feedback!
Profile picture
1. In 20 years, you’d like to have $500,000 to buy a vacation home. You currently have $50,000. At what rate must your $50K be compounded (assuming no additional contributions) for it to grow to $500,000 in 20 years?
Close icon
Play audio
Feedback
Powered by NumerAI
David Collins Ivan Kochetkov
Jennifer Stoner verified

Dj Tan and 60 other subject Principles of Accounting educators are ready to help you.

Ask a new question

*

Labs

-

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

*

Recommended Videos

-
3-you-are-planning-to-buy-a-house-and-want-to-have-25000-available-for-a-down-payment-how-much-will-you-invest-now-at-5-interest-compounded-daily-so-that-the-25000-will-be-ready-in-8-years-46944

3. You are planning to buy a house and want to have $25,000 available for a down payment. How much will you invest now at 5% interest compounded daily so that the $25,000 will be ready in 8 years?

Dj T.

3if-you-want-20000-ten-years-from-nowhow-much-would-you-have-to-invest-now-at-15-interest-compounded-monthly-52805

Kathleen C.

you-want-to-have-400000-when-you-retire-in-20-years_-if-you-can-earn-8-interest-compounded-weekly-how-much-would-you-need-to-deposit-now-into-the-account-to-reach-your-retirement-goal-63432

You want to have $400,000 when you retire in 20 years. If you can earn 8% interest compounded weekly, how much would you need to deposit now into the account to reach your retirement goal?

Andrew N.


*

Recommended Textbooks

-
Horngren’s Cost Accounting

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition
achievement 1,163 solutions
Cost Accounting A Managerial Emphasis

Cost Accounting A Managerial Emphasis

Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan 14th Edition
achievement 1,556 solutions
Principles of Accounting Volume 1: Financial Accounting

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper 1st Edition
achievement 1,576 solutions

*

Transcript

-
00:02 So, to tell for this, since we are not provided if we will use compounding the simple interest rate, but let's assume this is simple interest rate provided.
00:17 So the formula for the simple interest is equivalent to the final amount.
00:24 We went to the principal, or p, multiplied by 1 plus the rate and multiplied by 5, which is in years.
00:31 So the final amount that we want is $25 ,000.
00:36 And we are to find the initial deposit that we need in order to get $25 ,000.
00:43 And then we have one plus the rate can be understood from the problem that the rate of interest will be 5%.
01:01 Okay, so the rate therefore is equivalent to 0 .4 .4.
01:07 05%, you divide it by 100 % to get the decimal 4...
Need help? Use Ace
Ace is your personal tutor. It breaks down any question with clear steps so you can learn.
Start Using Ace
Ace is your personal tutor for learning
Step-by-step explanations
Instant summaries
Summarize YouTube videos
Understand textbook images or PDFs
Study tools like quizzes and flashcards
Listen to your notes as a podcast
Continue solving this problem
Create a free account to:
  • View full step-by-step solution
  • Ask follow-up questions with Ace AI
  • Save progress and study later
Continue Free
Join the community

18,000,000+

Students on Numerade


Trusted by students at 8,000+ universities

Numerade

Get step-by-step video solution
from top educators

Continue with Clever
or



By creating an account, you agree to the Terms of Service and Privacy Policy
Already have an account? Log In

A free answer
just for you

Watch the video solution with this free unlock.

Numerade

Log in to watch this video
...and 100,000,000 more!


EMAIL

PASSWORD

OR
Continue with Clever