Answered

Westonci.ca is the premier destination for reliable answers to your questions, brought to you by a community of experts. Explore thousands of questions and answers from a knowledgeable community of experts on our user-friendly platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

How much money must you set aside at age 40 to accumulate retirement funds of $100,000 at age 65, assuming a rate of interest of 7 percent?

Sagot :

Polyblock

Answer:

$18,424.92

Step-by-step explanation:

Assuming this is compound interest, we'll have to use this formula

A = P(1 + r)ⁿ

A = Final amount (100,000)

P = Starting amount (?)

r = Rate (.07)

n = Years (?)

65 - 40 = 25

This means you will save for 25 years, making n = 25

So far, our equation looks like this: 100,000 = P(1.07)²⁵

To isolate the variable, P, divide both sides by 1.07²⁵

100,000/1.07²⁵ = P(1.07)²⁵/1.07²⁵

P = 18,424.917752223962

You would need to set aside around $18,424.92 if you want to accumulate $100,000 in 25 years with 7% compound interest rate.

We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.