Question

Imagine that your goal is to retire 34 years from today with \$1,000,000$1,000,000 in savings. Assuming that you currently (i.e., today) have \$5,000$5,000 in savings, what rate of return must you earn on that savings to hit your goal? (Hint: Solve your future value formula for the discount rate, RR) *Make sure to input all percentage answers as numeric values without symbols, and use four decimal places of precision. For example, if the answer is 6%, then enter 0.0600.

Answer 1

Answer:

Present value after 34years = 1000000

Cash flow at present= 5000

Using

PV= CF(1+R)^t

1000000=5000(1+R)^34

R=1.169-1

R=0.168(16.8%)