Final answer:
The future value of the Holmans' retirement assets of $345,000 invested for 6 years at a 7.5% rate of return would be approximately $537,670.13, assuming compound interest with no withdrawals or additional contributions.
Step-by-step explanation:
To calculate the future value of an investment with a fixed annual rate of return, we use the compound interest formula:
FV = PV (1 + r)n
Where FV represents the future value of the investment, PV is the present value (initial amount), r is the annual interest rate (expressed as a decimal), and n is the number of years the money is invested. In this case, if the Holmans consider their retirement assets of $345,000 as dedicated for retirement in 6 years with a 7.5% rate of return:
FV = 345,000 (1 + 0.075)6
Calculating this, we find the future value of these investments:
FV = 345,000 (1.075)6
= 345,000 * 1.557885
= $537,670.13
This calculation assumes that the rate of return is compounded annually and that there are no withdrawals or additional contributions during the 6-year period.