Question

question 16 (1 point)
sofia is 45, and plans to retire at 65. her dream is to take a trip around the world after she retires, and figures she will need $64,000 to do it. her financial planner told her that according to the rule of 72, her investments would likely double in value every 10 years. how much does rita need to invest now so that it grows to her goal amount when she is 65.

give your answer as a number/word combination to the nearest thousand. for example: 987,654 would be entered as 988 thousand

Explanation:

Calculate the investment time horizon

$$ t = 65 - 45 = 20\text{ years} $$

Determine the number of doubling periods

$$ n = \frac{20\text{ years}}{10\text{ years/double}} = 2\text{ doublings} $$

Calculate the initial investment needed

$$ P = \frac{\$64,000}{2^2} = \frac{\$64,000}{4} = \$16,000 $$

Answer:

How much does Rita need to invest now so that it grows to her goal amount when she is 65.

Give your answer as a number/word combination to the nearest thousand. For example: 987,654 would be entered as '988 thousand'

<blank>16 thousand</blank>