What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?

Your parents will retire in 17 years. They currently have $370,000 saved, and they think they will need $1,600,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.

Solutions

Expert Solution

Future value=Initial investment*(1+r)^n

where

r-intrest rate

n-number of years of investment=17

Initial investment=370000

Future value=1600000

Putting values

1600000=370000*(1+r)^17

Solving we get

r-0.08995

Thus intrest rate to be earned=9.00%(Rounded to 2 decimal places)

jeff jeffy answered 2 years ago

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