RatedrillReturn needed to reach a goal
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
You have $2,000 today and want $3,000 in 5 years, with no further deposits. What annual return, compounded annually, gets you there exactly?
What this problem teaches
Set P/Y = C/Y = 1, so I/Y is the rate per period. Cash you pay out is negative and cash you receive is positive.
A hint if you get stuck
Solve FV = PV × (1 + r)^n for r: take the n-th root of FV / PV and subtract 1.
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