Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Reynaldo Sepulveda retires in 20 years and currently has savings of $125,000. Reynaldo expects to need $650,000 at the beginning of his retirement and has no additional funds saved. Determine the annual interest rate he will need to meet his goal.
Expert Solution
Step 1
Interest Rate:
- With the help of interest rate, present value, or future value of the cash flows can be computed.
Information Provided:
Term = 20 years
Present value (savings) = $125,000
Future value = $650,000
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Solved in 3 steps
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