Posted by **Molly** on Sunday, March 11, 2012 at 10:33am.

If you deposit 1200.00 annually with 5% compounded interest, how many years will it take to get to a million dollars?

- Math -
**MathMate**, Sunday, March 11, 2012 at 10:47am
Assuming interest is compounded annually (yearly) at r% starting from an initial amount P, then the compound interest formula gives the final amount A after n years.

A=P(1+r/100)^n

For the given case

1000000=1200(1.05)^n

Rearrange:

(1.05)^n=1000000/1200=1000/1.2

Take log on both side

n(log 1.05)=log (1000/1.2)

Solve for n

n=log(1000/1.2)/log(1.05)

=137.84 (approx)

or about 137 years and 10 months.

Not forgetting that we all will probably be making a million dollars a month by then.

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