document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=492061>Question 492061</A>: <I><SPAN STYLE=\"word-break: break-all;\"> How can one invest $800.00 for 25 years and receive a $15,000.00 return?\r<BR>\n" );
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document.write( "If $800.00 is invested for 25 years and the return is $15,000.00 what are the interest rates? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #334936 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=334936\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> if you invest $800.00 per year for 25 years, then you will have 25 * $800.00 = $20,000 at the end of the 25th year with 0% interest.\r<BR>\n" );
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document.write( "in other words, if you only expect to have $15,000 at the end of the 25 years, you need to earn a negative interest.\r<BR>\n" );
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document.write( "this is not ordinarily done.\r<BR>\n" );
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document.write( "if you divide $15,000 by $800, then you will get 18.75 years.\r<BR>\n" );
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document.write( "if you pick a number of years less than 18.75, you will wind up with a positive interest rate being required.\r<BR>\n" );
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document.write( "we will assume you invest $800.00 at the end of each year.\r<BR>\n" );
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document.write( "if you do that for 18.75 years and you expect $15,000 at the end of it, then the interest rate required each year is equal to 0%.\r<BR>\n" );
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document.write( "if you want to have $15,000 at the end of 18 years, then the interest rate required is 0.48%\r<BR>\n" );
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document.write( "if you want to have $15,000 at the end of 15 years, then the interest rate required is 3.11%\r<BR>\n" );
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document.write( "if you ant to have $15,000 t the end of 10 years, then the interest rate required is 13.37%.\r<BR>\n" );
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document.write( "if you invest $800.00 at the end of each year for 25 years, and the interest rate you earn on your money is 5% per year compounded annually, then you will have $38,181.68 at the end of the 25 years.\r<BR>\n" );
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document.write( "this assumes that you re-invest the interest each year at the same rate of interest. \r<BR>\n" );
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document.write( "if you invest $800.00 at the end of each year for 25 years, and the interest rate you earn on your money is 2% per year compounded annually,then you will have $25,624.24 at the end of the 25 years.\r<BR>\n" );
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document.write( "if you only want $15,000 at the end of 25 years, and you earn at 2% interest per year, then you only need to invest $468.31 per year for 25 years.\r<BR>\n" );
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document.write( "here's an online calculator that you can use to play with the numbers.\r<BR>\n" );
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document.write( "<a  rel=nofollow HREF= \"http://buyupside.com/calculators/recurringinvestmentcalculatordec07.htm\" target = \"_blank\">http://buyupside.com/calculators/recurringinvestmentcalculatordec07.htm</a>\r<BR>\n" );
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document.write( "you select the investment frequency (i selected annual).<BR>\n" );
document.write( "you enter the investment amount (i entered $800.00)<BR>\n" );
document.write( "you select the annual rate of return (i entered 2% per year).<BR>\n" );
document.write( "this is the annual rate of return that you expect from your investment.<BR>\n" );
document.write( "you enter the number of years (i entered 25).<BR>\n" );
document.write( "you select \"calculate\" and it tells you how much money you'll have at the end of the investment period.\r<BR>\n" );
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document.write( "it doesn't tell you the interest rate.<BR>\n" );
document.write( "you have to tell it.\r<BR>\n" );
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document.write( "you can, however, play with the interest rate until you get the future value that you want.\r<BR>\n" );
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document.write( "in your problem, in order to get $15,000 future value, i had to enter an interest rate of -2.5% per year.\r<BR>\n" );
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document.write( "if you could enter 0%, you would get a future value of $20,000.\r<BR>\n" );
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document.write( "since you can't, then enter something very small, like .00001 and it will give you an answer.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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