Answer:
$18,424.92
Step-by-step explanation:
Assuming this is compound interest, we'll have to use this formula
A = P(1 + r)ⁿ
A = Final amount (100,000)
P = Starting amount (?)
r = Rate (.07)
n = Years (?)
65 - 40 = 25
This means you will save for 25 years, making n = 25
So far, our equation looks like this: 100,000 = P(1.07)²⁵
To isolate the variable, P, divide both sides by 1.07²⁵
100,000/1.07²⁵ = P(1.07)²⁵/1.07²⁵
P = 18,424.917752223962
You would need to set aside around $18,424.92 if you want to accumulate $100,000 in 25 years with 7% compound interest rate.
