In: Finance
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.
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)