FV = Pmt x ( (1 + i)^n - 1 ) / i
FV = 4000000
n = 35 x12 = 420 months
4000000 = 500 x ( (1 + i)^420 - 1 ) / i
This can only be solved by iteration (trial and error) or using Excel (or calculator) RATE function
=RATE(420,-500,,4000000) = 1.0673%
Annually = 12 x 1.0673% = 12.81%
Suppose you invest $500 in a stock mutual fund at the end of each month. When you retire at the end of your 35 year career, your account is worth $4,000,000. What annual rate of return did you earn over the 35 years?
I know the answer is 12.81%, but how do I get that answer on a financial calculator?
I have an HPBII+.
