1 You deposit $17,000 in a retirement account on your 25th birthday, and you plan to retire on your 65th birthday. (a) If you expect to have a quarter million dollars in the retirement account when you retire, what nominal annual interest rate r, compounding

1 You deposit $17,000 in a retirement account on your 25th birthday, and you plan to retire on your 65th birthday. (a) If you expect to have a quarter million dollars in the retirement account when you retire, what nominal annual interest rate r, compounding

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1CQQ

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Question

1 You deposit $17,000 in a retirement account on
your 25th birthday, and you plan to retire on your
65th birthday.
(a) If you expect to have a quarter million dollars in
the retirement account when you retire, what
nominal annual interest rate r, compounding
annually, will make this happen?
(b) If you expect to have $250,000 in the
retirement account when you retire at 65, what
nominal annual interest rate r, compounding
quarterly, will make this happen?

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