Your retirement account has a current balance of $50,000. You plan to add $6,000 a year to the account for each of the next 30 y

Question

3 years ago

10

Your retirement account has a current balance of $50,000. You plan to add $6,000 a year to the account for each of the next 30 y

ears. Use a financial calculator or Excel to find what interest rate you need to earn in order to have $1,000,000 in the account at the end of the 30 years.

Business

1 answer:

enot [183] · Answer 1 · 2022-05-29T15:43:50+03:00

Answer:

21.45%

Explanation:

Remaining amount to have $1,000,000 = $1,000,000 - $50,000 = $950,000

Using the interest rate function RATE(nper,pmt,pv,fv) in the excel, we obtain an interest rate of 21.45%

Where,

nper = number of period = 30

pmt = annual payment

pv = present value which has a default value of 0.

fv = future value = $950,000

Note: Find attached the excel sheet to see result.

Download xlsx