You have decided you would like to deposit $5,000 into your account today and not touch it until you retire in 45 years. You would like to have accumulated $80,000 at retirement from this deposit if your savings account pays interest quarterly. a)What would your nominal required rate of return (% per annum) be on this deposit? b)What would your effective annual rate of return be on this deposit?

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A: Calculate the monthly saved amount as follows:

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A: Given:

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.