Question

You have $50,000 to invest (YAY!). You need $350,000 in the account to retire in 30 years. At what continuously compounded interest rate would you need to invest to reach your goal?

What formula will you be using? Type your answer in the first math box below.

In the following math boxes, make your substitutions and show the ALGEBRAIC steps to your solution.

Answer 1

You need to invest at a continuous compound interest rate of 6.701355026%

Explanation:

The formula to use is the compound interest formula:A=P(1+r/100)^t

where A=Total amount at the end of the investment period

P=Principal amount

R=Rate of interest

T=Investment tenor/time

Now,

350,000=50000(1+r/100)^30 is what needs to be simplified to 6.701355026%