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Joshua needed money for some unexpected expenses, so he borrowed $5,355.26 from a friend and agreed to repay the loan in seven equal installments of $1,100 at the end of each year. The agreement is offering an implied interest rate of _________

Joshuaâs friend, Willie, has hired a financial planner for advice on retirement. Considering Willieâs current expenses and expected future lifestyle changes, the financial planner has stated that once Willie crosses a threshold of $1,387,311 in savings, he will have enough money for retirement. Willie has nothing saved for his retirement yet, so he plans to start depositing $25,000 in a retirement fund at a fixed rate of 6.00% at the end of each year. It will take____________for Willie to reach his retirement goal.

1 Answer

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Answer:

10%

25.14 years

Step-by-step explanation:

A financial calculator can be used to solve these problems

PMT = $-1,100

PV = $5,355.26

FV = 0

N = 7

Compute I = 10%

PMT = $-25,000

FV = $1,387,311

I = 6%

PV = 0

Compute N = 25.14 years

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