At age 23, you inherit from your grandmother = $70,000
Future accumulated Value required at age 30th = $105,000
Calculating the Rate of Return you must earn to accumulated the amount:-
Annualized Rate of Return = (Future Value /Current Value)^(1/n) - 1
Where,
n= no of periods = 7 years
Annualized Rate of Return = ($105,000/$70,000)^(1/7) - 1
Annualized Rate of Return = 1.05963 - 1
Annualized Rate of Return = 5.96%
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