Answer:
rate = 6.54%
Explanation:
we need to find the rate at which a capital of 300,000 becomes 1,000,000 in a period of time of 19 years.
So we build the following equation:
[tex]300,000 (1+r)^{19} =1,000,000[/tex]
[tex](1+r)^{19} =1,000,000 \div 300,000 [/tex]
[tex]r=\sqrt[19]{1,000,000 \div 300,000}-1[/tex]
rate = 0.065417765 = 6.54% after rounding
This will be the rate my parent will require to generate 1,000,000 in 19 years with their current savings of 300,000.
