average balance: (50,000 + 1,500,000) / 2 = 775,000
200 / 775,000 = 0.00026 < your return is reduced, on average, by this rate annually, so...
0.05875 - 0.00026 = 0.05849
[( 1 + (0.05849 / 12))^12] - 1 = 0.06009
t = ln(FV/PV) / ln(1 + r)
t = ln(1.5m / 50k) / ln(1.06009)
t = 3.40120 / 0.05835
t = 58.28974 years
How long would it take a $50,000 investment at a 5.875% annual rate compounded monthly and a $200 annual membership fee to reach $1.5 million dollars? Please show how you arrived at the formula!
Thanks
