Activity 16 – Millionaire and Interest Rates –
Instructional Goal: You will COMPUTE how many years it will take to become a millionaire given the investment amount,
monthly deposit, and inflation rate by using an online calculator; you will also state the relationship between inflation and
value of dollar. (20 pts)
1.
Go to the website
How many YEARS?
http://www.bankrate.com/calcula
tors/savings/saving-milliondollars.aspx
2.
How Old will You be?
Use the numbers I’ve
given you in this
sample to find out
how long until you’re
a millionaire.
What will the $1,000,000 be worth in today’s
dollars
3 pts
2. Use the numbers I’ve
given you in the sample to
solve
How many YEARS?
How Old will You be?
What will the $1,000,000 be worth in today’s
dollars
3 pts
3.
Read my EXAMPLE. It
will HELP!
a. Use your OWN
initial amount and
monthly deposit to
Solve to how much
initial deposit and
monthly deposit
you will need to
become a
millionaire by age
75.
What do you NEED to do to become a
millionaire by age 75?
Initial Amount_____________?
First figure out how many years until you are
Monthly Deposit ________________
75. (75 minus your age = _?__)
Average Return 9%
Try out different combinations of initial
amounts and monthly deposits at 9%
average return and 3% average inflation.
Average Inflation 3%
Initial amount = _______________
Monthly deposit = _____________
Example: Wardell is 43. 75-43= 32 years
left to save. I would need to have an initial
amount of $10,000 and $400 monthly
deposit @9% return at 3% inflation. BUT my
1,000,000 dollars will only be worth
$388,337
Give me one reason WHY My million will be
worth less in 32 years?
_____________________
6 pts
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Activity 16 – Millionaire and Interest Rates –
Instructional Goal: You will COMPUTE how many years it will take to become a millionaire given the investment amount,
monthly deposit, and inflation rate by using an online calculator; you will also state the relationship between inflation and
value of dollar. (20 pts)
Go to this website
4.
http://www.bankrate.co
m/calculators/savings/co
mpound-interestcalculator-tool.aspx
a.
Use this tool to
solve for yearly
return in dollars
($$)
Investment of $10,000 @ 2% in 10 years =
$12,190 yearly total return in $$
a) Investment of $10,000 @ 5% in 10 years =
$_________ yearly total return in $$
b) Investment of $10,000 @ 10% in 10 years
= $_________ yearly total return in $$
c) Explain the relationship between Interest
Rate and $$ (yearly total return) on how
much money you have after 10 years.
__________________________________
__________________________________
3 pts
Millionaire & Interest Rate Activity – bankrate.com
Type your answers to questions 1-4 using websites given @ bankrate.com
on Activity 16 page
Save Activity 16 in your Intro to Computers/Activities folder
Upload to Blackboard or Print Activity 12 (ask first!) once completed and, if
printing, hand in to teacher
Header of Page
Write Name, Date, Mod at top of paper
Total Points
Due Date
Due Date: (on time-full credit; lose 1 pt/late day)
Points
15
1
1
Points
3
20 pts