Question

Thurston wants to retire in Nevada when he is 80 years of age. Thurston, who is now 55, believes he'll need $400,000 to retire comfortably. To date, he has set aside no retirement money. To get an interest rate of 6% compounded annually, he'll have to invest today. Using the tables found in the textbook, determine how much he must invest. A. $96,500 B. $69,900 C. $93,200 D. $92,300

Answer 1

The amount he must invest is $93200

Explanation:

We are given

Amount is $400000

A=400000

interest rate is 6%

r=0.06

t=80-55=25 years

P is amount to be invested

we can use formula

`A=P(1+r)^t`

now, we can plug values

`400000=P(1+0.06)^(25)`

`P=93199.452`

`P=93200`