Answer:
The principal investment required to get a total amount of $ 1,000,000.00 from compound interest at a rate of 6% per year compounded 12 times per year over 45 years is $ 67,659.17.
Step-by-step explanation:
Given
To determine:
Using the formula
[tex]A\:=\:P\left(1\:+\:\frac{r}{n}\right)^{nt}[/tex]
[tex]P\:=\frac{A}{\left(1\:+\:\frac{r}{n}\right)^{nt}}[/tex]
substituting A = 1000000, r = 0.06, t = 45, and n = 12
[tex]P\:=\frac{1000000}{\left(1\:+\:\frac{0.06}{12}\right)^{12\cdot 45}}\:[/tex]
[tex]=\frac{1000000}{1.005^{540}}[/tex]
[tex]P = 67659.17[/tex] $
Therefore, the principal investment required to get a total amount of $ 1,000,000.00 from compound interest at a rate of 6% per year compounded 12 times per year over 45 years is $ 67,659.17.
