Question

Suppose I start with $7,800 and I want to have $18,400 twenty years from now. What interest rate do I need (comp yearly)?

Answer 1

$7,800 + 20x = $18,400 can be used to solve this equation, when x is the amount needed per year.

7800 - 7800 + 20x = 18400 - 7800.

20x = 10600. You would need 10,600 over 20 years but, how much would you need per year?

Well 20x/20 = x and 10,600/20 = 530

x = 530. You would need an interest of $530 yearly