Question

Catherine decides to think about retirement and invests at the age of 21. She invests $25,000 and hopes the investment will be worth $500,000 by the time she turns 65. If the interest compounds continuously, approximately what rate of growth will she need to achieve his goal? Round to the nearest tenth of a percent.

Answer 1

Answer:i belive the answer should be 8800 dollars a year

Explanation:

500000/25000

= ans X 440

Answer 2

The rate of growth Catherine would need to achieve for her investment to reach $500,000 by age 65 is approximately 0.24%.

To determine the rate of growth Catherine would need to achieve, we can use the formula for compound interest: A = P * e^(rt), where A is the future value, P is the principal amount, e is Euler's number (approximately 2.71828), r is the interest rate, and t is the time in years.

In this case, Catherine invests $25,000 and wants it to grow to $500,000.

So, we have 500,000 = 25,000 * e^(r * 65).

Dividing both sides of the equation by 25,000, we get 20 = e^(r * 65).

Taking the natural logarithm of both sides, we have ln(20) = r * 65.

Solving for r, we find that the approximate rate of growth Catherine would need to achieve is r ≈ 0.0024, or 0.24%.