An engineer deposits $860 each month into a retirement account. After 30 years, the balance in the account is $1.9 milion. Determine the effective annual rate of return for this account. Express your answer in % (not decimal) to the nearest 0.1%.

An engineer deposits $860 each month into a retirement account. After 30 years, the balance in the account is $1.9 milion. Determine the effective annual rate of return for this account. Express your answer in % (not decimal) to the nearest 0.1%.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 5RE: Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit...

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Question

An engineer deposits $860 each month into a retirement account. After 30 years, the balance
in the account is $1.9 milion. Determine the effective annual rate of return for this account.
Express your answer in % (not decimal) to the nearest 0.1%.

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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