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jok3333
1 month ago
5

Suppose you invest $500 in a stock mutual fund at the end of each month. When you retire at the end of your 35-year career, your

account is worth $4,000,000. What annual rate of return did you earn over the 35 years
Business
1 answer:
soldi70 [3.6K]1 month ago
8 0

Answer:12.81%

Explanation:

PMT (the monthly investment amount) is $500

n = 35 years = 35 x 12 = 420 months

The future value (FV) of the account over 35 years is $4,000,000

Present value (PV) = 0

i/r =?

By inputting these values into a financial calculator, we arrive at:

i/r = 1.07%/month

--> The annual rate of return computes to 1.07% x 12 = 12.81%

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