Question
In: Finance
Derek can deposit $11,000 on each birthday beginning with his 26th and ending with his 65th....
Derek can deposit $11,000 on each birthday beginning with his 26th and ending with his 65th. What will the rate on the retirement account need to be for him to have $3,000,000 in it when he retires on his 65th birthday?
Hello can I please get help on this homework question? Can you please solve using a financial calculator? Thank you!
Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))
Solutions
Expert Solution
Information provided:
Future value= $3,000,000
Annual deposit = $11,000
Time= 65 years - 26 years = 39 years
The question is solved by computing the yield to maturity.
The yield to maturity is calculated by entering the below in a financial calculator:
FV= 3,000,000
N= 39
PMT= -11,000
Press the CPT key and I/Y to compute the yield to maturity.
The value obtained is 8.5161.
Therefore, the yield to maturity is 8.5161%.
jeff jeffy answered 2 years agoRelated Solutions
Derek can deposit $11,000 on each birthday beginning with his 26th and ending with his 65th....
Derek can deposit $11,000 on each birthday beginning with his
26th and ending with his 65th. What will the rate on the retirement
account need to be for him to have $3,000,000 in it when he retires
on his 65th birthday?
Answer format: Percentage Round to: 4
decimal places (Example: 9.2434%, % sign required. Will accept
decimal format rounded to 6 decimal places (ex: 0.092434))
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Derek can deposit $11,000 on each birthday beginning with his 26th and ending with his 65th....
Derek can deposit $11,000 on each birthday beginning with his
26th and ending with his 65th. What will the rate on the retirement
account need to be for him to have $3,000,000 in it when he retires
on his 65th birthday?
Answer format: Percentage Round to: 4
decimal places (Example: 9.2434%, % sign required. Will accept
decimal format rounded to 6 decimal places (ex: 0.092434))
#22 Derek can deposit $11,000 on each birthday beginning with his 26th and ending with his...
#22
Derek can deposit $11,000 on each birthday beginning with his
26th and ending with his 65th. What will the rate on the retirement
account need to be for him to have $3,000,000 in it when he retires
on his 65th birthday?
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decimal places (Example: 9.2434%, % sign required. Will accept
decimal format rounded to 6 decimal places (ex: 0.092434))
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