Jennifer just turned 23 and can save $500 per quarter, starting in three months. If Jennifer can earn 7% compounded quarterly, what age will she be when she accumulates $1,000,000?
To find out the age Jennifer will be when she accumulates $1,000,000, we need to calculate the number of quarters it will take for her savings to reach that amount. Let's break down the problem step by step:
1. Determine how much Jennifer saves per quarter:
Jennifer saves $500 per quarter.
2. Calculate how many quarters it will take for Jennifer to reach $1,000,000:
Divide $1,000,000 by $500 to find the number of quarters: $1,000,000 / $500 = 2000 quarters.
3. Determine the time in years:
Since we know that there are 4 quarters in a year (since Jennifer saves quarterly), divide the total number of quarters by 4: 2000 quarters / 4 = 500 years.
4. Calculate Jennifer's age when she accumulates $1,000,000:
Since Jennifer just turned 23, we add 23 to the time in years: 23 + 500 = 523.
Therefore, Jennifer will be 523 years old when she accumulates $1,000,000. However, it's important to note that this calculation assumes Jennifer saves consistently without any withdrawals or changes in her savings plan. Additionally, projecting this far into the future may not account for inflation or other factors.