Question
Two friends received $25,000 on their 18 th birthday. Both decide to invest the money to become millionaires. Jill is more risk-averse than Jack, so
Two friends received $25,000 on their 18th birthday. Both decide to invest the money to become millionaires. Jill is more risk-averse than Jack, so Jill invests in stocks expected to earn 8% while Jack invests in stocks expected to earn 10%. Jack and Jill expect to invest an additional $10,000 at the end of each year. By how many years sooner will Jack become a millionaire before Jill?
4.25 years
6.45 years
2.88 years
3.36 years
5.4 years
Part B: If Jill wants to become a millionaire at the same time as Jack, how much money will she need to annually contribute?
$14,285
$13,867
$14,935
$11,674
$12,425
(Please use an finance equation and/ or formula rather than using a sheet chart, excel, or graph)
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