Question
You contribute $1000 every month into a retirement plan. Assume you plan on making the same $1000 contribution every month for the next 35 years.
You contribute $1000 every month into a retirement plan. Assume you plan on making the same $1000 contribution every month for the next 35 years. The expected annual return on this fund is 9.08% p.a.
Assume you are unhappy with a rate of 9.08%. You decide to invest in a riskier fund that generates higher returns. Suppose your goal is to have $5 million at retirement. What average annual return should you earn on this riskier fund to end up with $5 million at retirement?
Group of answer choices
About 15.75%
About 10%
About 11.05%
About 12.75%
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Financial Management Theory and Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
2nd Canadian edition
176517308, 978-0176517304
