Question

Jerry has just received an inheritance of $25,000, and he would like to use it to help him with his retirement. Since Jerry is 25 years old, he figures that the $25,000 can be invested for 40 years before he will need to use it for retirement. Jerry wants to know what interest rate would be necessary for the $25,000 to grow to provide an amount so that he can have a monthly income of $7,000 earned from the interest only. Assume that Jerry is able to invest in real estate and can earn a 15% return on his investment.