You have been told that you need $25,600 today in order to have $100,000 when you retire 35 years from now. what rate of interest was used in the present value computation? assume interest is compounded annually
The formula is A=p (1+r)^t A future value 100000 P present value 25600 R interest rate? T time 35 years We need to solve for r R=(A/p)^(1/t)-1 R=(100,000÷25,600)^(1÷35)−1 R=0.0397×100 R=3.97% round your answer to get R=4%
