Find what annual rate of return must earn on investment

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Question a. Assume you are currently aged twenty (20) and your parents inform you that they are planning to give you $100,000 on your 30th birthday (10 years from now). If the relevant discount rate is 5%, how much is your gift worth today? Provide complete calculations in your answer.

Question b. Assume you have $20,000 in your bank account. After five (5) years, you are intending to have $35,000 in your account. What annual rate of return must you earn on your investment to achieve your target? Provide complete calculations in your answer.

Reference no: EM132519685

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