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Radda [10]
3 years ago
7

Finding the required interest rate: Your parents will retire in 18 years. They currently have $250,000, and they think they will

need $1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don’t save any additional funds? excel formula
Business
1 answer:
Salsk061 [2.6K]3 years ago
7 0

Answer:

i= 8% annual compunded

Explanation:

Giving the following information:

Your parents will retire in 18 years. They currently have $250,000, and they think they will need $1,000,000 at retirement.

We need to calculate the interest rate required to reach the $1 million goal in 18 years without any additional deposit.

FV= PV*(1+i)^n

Isolating i:

i= [(FV/PV)^(1/n)] - 1

i= [(1,00,000/250,000)^(1/18)] - 1= 0.08

i= 8% annual compunded

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Big Dom’s Pawn Shop charges an interest rate of 27.5 percent per month on loans to its customers. Like all lenders, Big Dom must
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Answer:

APR is 330% and EAR is 1745.53%

Explanation:

Given:

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APR or annual percentage rate = 27.5×12 = 330%

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Here,

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substituting the value in the above formula:

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