Determine the interest rate compounded annually

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Larry wants to determine what kind of growth he needs in order to achieve a $2,500,000 in net worth when he retires. To achieve this goal, he plans to invest $12,500 each year (starting one year from now) into an account that earns an unknown interest compounded annually. The amount of time Larry has until he plans to retire is 30 years. Determine the interest rate compounded annually in order for him to achieve his goal in 30 years. Provide a cash flow diagram. Show your work for both interpolation AND Excel and state which method is more accurate

Reference no: EM13853265

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