Your uncle plans to retire in 20 years. He currently has $500,000, and think he will need $2,500,000 at retirement. If he can save $10,000 at the end of each year in the following 20 years, what annual rate of interest must he earn to reach his goal

The annual rate of interest comes 7.37%

Explanation:

The computation of the annual rate of return is shown below:

Given that

Present value = $500,000

Future value = $2,500,000

PMT = $10,000

NPER = 20 years

Now we use the RATE formula

= RATE(NPER,PMT,-PV,FV,type)

Perform this on an excel

After applying the above formula,

The annual rate of interest comes 7.37%

And, the same is to be considered

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