A mutual fund has been advertising that, had you been depositing $250 per month in the fund over the last ten years you would have accumulated $85,000. Assuming these deposits were made at the beginning of the month over 120 months calculate the effective annual return of the fund.

Hint: use Goal Seek to solve.

The effective annual return can be set up in two ways:

(1 + monthly return)¹²- 1: This is the compounded annual return (preferable since it makes allowance for the reinvestment of each month's earnings).

12 * monthly return: This is the method often used by banks.

Monthly payment	250
Number of months	120
Effective monthly return?
Accumulation