Silas Is About to Begin Regular Month-End Contributions of $500

question 53

Short Answer

Silas is about to begin regular month-end contributions of $500 to a bond fund. The fund's long-term rate of return is expected to be 6% compounded semi-annually. Rounded to the next higher month, how long will it take Silas to accumulate $300,000?

---

Definitions:

Budget Constraint

The cap on the combinations of goods a consumer is able to purchase, determined by their earnings and the cost of those items.

Utility

A measure of satisfaction or happiness that consumers derive from consuming goods and services.

Train Tickets

Tickets that grant the holder the right to travel on a train service, typically specifying the journey details.

Diminishing Marginal Utility

Diminishing Marginal Utility is an economic concept stating that as a person consumes more of a good or service, the satisfaction (utility) gained from consuming each additional unit decreases.