Question 26 You want to retire in 25 years. You currently have $200,000 saved and you believe you need $1,200,000 at retirement. What annual interest rate will you need to earn to meet your goal?

Explanation:

If you need $200,000 in your account ten years from now, the present value, or the amount you need to start with today, changes based on various assumed rates of return:

if you earn a 3 percent return, you'll need $148,818 to start

at 4 percent, you'll need $135,112

if you get a 5 percent return, you only need to start with $122,782

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