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An engineer deposits $540 each month into a retirement account. After 30 years, the balance in the account is $1.7 million. Determine the effective annual rate of return for this account. Express your answer in % (not decimal) to the nearest 0.1%.

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  1. Today, 16:25
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    Each month 540 there are 12 months in a year

    540*12 = 6480 yearly

    n = 30 years

    FV = $1700000

    FV = pmt * [ (1+r) ^n-1/r) ]

    1700000 = 6480[ (1+r) ^30-1/r]

    1700000/6480 = 6480[ (1+r) ^30-1/r]/6480

    262.35 = (1+r) ^30-1/r

    262.35r = (1+r) ^30-1

    l
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