After saving diligently your entire career, you and your spouse are ready to retire with a nest egg of $600,000. You need to invest this money in a mix of stocks and bonds that will allow you to earn $5,000 per month for 30 years. What annual interest rate (APR) do you need to earn?
A) 9.40%
B) 10.13%
C) 8.37%
D) 9.61%

Question

Quizplus · Accepted Answer

To find the required annual interest rate, you can use the formula for the present value of an annuity. Solving for the interest rate that allows $600,000 to provide $5,000 monthly for 30 years results in approximately 9.40% APR.

After Saving Diligently Your Entire Career, You and Your Spouse