Boretti has $400,000 in a stock fund. The fund pays a 10% return, compounded annually. If he does not make another deposit into the account, how long will it take for the account to increase to $2 million? (Do not round intermediate calculations. Round the final answer to two decimal places.)

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Asked Sep 28, 2019
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Boretti has $400,000 in a stock fund. The fund pays a 10% return, compounded annually. If he does not make another deposit into the account, how long will it take for the account to increase to $2 million? (Do not round intermediate calculations. Round the final answer to two decimal places.)

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Expert Answer

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The future value (FV) is the amount which is received in the future, it includes the present value (PV) of the investment and the compound interest on such...

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Compound interest = Future value - Present value =$2,000,000-$400,000 =$1,600,000

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