The rate of return required to have $100,000 in 10 years with an annual savings of $5,000 starting today is 11.43%.
The compound interest is the computed interest on an investment's principal plus all previously accumulated interests.
The rate for the compound interest can be computed using an online finance calculator as follows:
Data and Calculations:
N (# of periods) = 10
I/Y (Interest per year) = 11.43%
PV (Present Value) = $5,000
PMT (Periodic Payment) = $5,000
Results:
FV = $100,117.84
Interest per year = 11.43%
Sum of all periodic payments = $50,000 ($5,000 x 10 years)
Initial deposit = $5,000
Total Interest $45,117.84
Thus, the rate of return required to have $100,000 in 10 years with an annual savings of $5,000 starting today is 11.43%.
Learn more about determining compound interest rate at https://brainly.com/question/24576997 and https://brainly.com/question/25805668
