Question

Bryce has been investing in his employee sponsored retirement account since he was 23 years old. He is now 65 years old and ready to retire. He has invested a total of $30,000, but the total amount of money in his retirement account is currently $160,000. What is Bryces rate of return on his retirement investment?

Answer 1

r = 64

Explanation:

The number of years for the investment plan = 65-23= 32 years

Initial amount= $30000

Final amount= $160000

To find the rate of return

We will use the compound interest formula.

The number of times it was compounded= number of years because it was not compounded monthly.

A= p(1+r/n)^(nt)

160000= 30000(1+r/32)^(32*32)

160000/30000= (1+r/32)^(32*32)

5.333= (1+r/32)^(1024)

1024√5.333= (1+r/32)

1.001636073 = 1 +r/32

2.01636073= r/32

32(1.01636073)= r

64.05= r