Today, you turn 21. Your birthday wish is that you will be a millionaire by your 40th birthday. In an attempt to reach this goal, you decide to save $25 a day, every day until you turn 40. You open an
Investment account and deposit your ﬁrst $25 today. What rate of return must you earn to achieve
Your goal?

Question

Quizplus · Accepted Answer

To find the required rate of return, you need to calculate the future value of a series of daily deposits over 19 years (from age 21 to 40) and solve for the interest rate that results in a future value of $1,000,000. The correct rate of return is approximately 15.07%.

Today, You Turn 21