# Use a spreadsheet to estimate the accumulation in your retirement account during 20 years of your career as a chemical

## Question:

Use a spreadsheet to estimate the accumulation in your retirement account during 20 years of your career as a chemical engineer. Turn in the spreadsheet along with the answers to the questions posed below. Also turn in a version with the formulas displayed (using the Ctrl-s command). Further, use the following estimations (this simple approach is approximate, but useful):
a. Have the spreadsheet display the following as input values that can be changed:

• A starting salary per year put in \$75,000
• An average annual raise (%) put in 5%
• Projected % interest earned per year put in 8%
• % saved for retirement per year put in 6%

b. Compute your salary for each year, which will be the previous year's salary plus the average raise.
c. Compute the balance in your retirement account each year, which will be the previous year's balance plus interest earned on that balance plus the fraction of the current year's salary saved.
d. How much is in your retirement account at the end of 20 years? How much does it change if you save 10% instead of 6%? There is a lesson to be learned from this problem, which is that you should save some of your income every year.
e. While saving 6%, how much is in your retirement account at the end of 20 years if you are very successful and rise to very responsible positions, causing your average raises to be 10% instead of 5%?