Assume you recently graduated and accepted a job with a consulting firm. Although you like your...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume you recently graduated and accepted a job with a consulting firm. Although you like your job, you are also looking forward to retiring at age 65. To ensure your retirement is comfortable, you intend to invest $5,000 of your salary into a retirement fund at the end of each year. a. Complete the spreadsheet model found on the Excel file. Use a return rate of 6.1% in your calculations. If you start contributing money at age 24, how much money would you expect to have in your retirement fund at age 65? Hint: Shown below is a screenshot of the calculations required for this assignment. To quickly populate the age column, enter the first two or three values, and then drag down across the cells that you want to fill. X✓ fx 6.1% A B D E 1 Return Interest Beginning Balance Annual Contribution F Ending Balance 2 Age Rate (%) Earned 3 24 0 0.061 =C3*83 5000 =B3+03+E3 4 25 =F3 -$C$3 =C4 B4 =$E$3 =B4+04+E4 5 26 F4 -$C$3 -C5 B5 -$E$3 -B5+05+E5 6 27 =F5 =$C$3 =C6*B6 =$E$3 =B6+D6+E6 7 28 =F6 -$C$3 =C7*87 =$E$3 =87+D7+E7 b. In the second part, you need to analyze how your retirement fund balance varies with respect to changes in the Return Rate and the Annual Contribution. Complete the table labeled 'Ending Balance at Age 65 as a Function of Return Rate and Annual Contribution' by creating a two-way Data Table similar to the one created in-class. The table should include return Rate values between 2.5% and 7.5%, and Annual Contribution values between 2,500 and 7,500. Use the Return Rate in cell C3 and the Annual Contribution in cell E3 as the input cells. Reference the Ending Balance at age 65 cell as the table output. Use the data table to answer the following sample questions: • If the return rate is 7.5%, how much do you need to contribute each year in order to have an ending balance of $1,058,793.26? • How much money would you expect to have when you retire if your annual contribution is 3,000 and the return rate is 5.5%? • If you contributed 3,500 each year, would any of the return rates used in the data table result in an ending balance greater than $1,000,000? c. Refer to part a. How much money would you need to contribute each year in order to have an ending balance of 2,000,000 dollars at age 65? Hint: Use the Goal Seek tool like we studied in class. The "Changing Cell" in Goal Seek will be the "Annual Contribution" at age 24. Question 2 1.25 pts If you contributed 4,000 each year, would any of the return rates used in the data table result in an ending balance greater than $1,000,000? yes no 1.25 pts O Question 3 Enter the value in cell A10. Question 4 1.25 pts Use Goal Seek to estimate how much money you would need to contribute each year in order to have an ending balance of 2,000,000 dollars at age 65 (Use a return rate of 6.1% in your calculations. When entering your answer, do not use the $ sign). Question 5 1.25 pts Use the data table to answer the following question: If the return rate is 7.0%, how much do you need to contribute each year in order to have an ending balance of $1,037,845.08? (When entering your answer, do not use the $ sign). Question 6 1.25 pts Use the data table to answer the following question: How much money would you expect to have when you retire if your annual contribution is 3,000 and the return rate is 5.5%? (When entering your answer, do not use the $ sign). Question 7 1.25 pts If you start contributing 5,000 at age 24, how much money would you expect to have in your retirement fund at age 65? (Use a return rate of 6.1% in your calculations. When entering your answer, do not use the $ sign). Question 8 Enter the value in cell S3. 1.25 pts Assume you recently graduated and accepted a job with a consulting firm. Although you like your job, you are also looking forward to retiring at age 65. To ensure your retirement is comfortable, you intend to invest $5,000 of your salary into a retirement fund at the end of each year. a. Complete the spreadsheet model found on the Excel file. Use a return rate of 6.1% in your calculations. If you start contributing money at age 24, how much money would you expect to have in your retirement fund at age 65? Hint: Shown below is a screenshot of the calculations required for this assignment. To quickly populate the age column, enter the first two or three values, and then drag down across the cells that you want to fill. X✓ fx 6.1% A B D E 1 Return Interest Beginning Balance Annual Contribution F Ending Balance 2 Age Rate (%) Earned 3 24 0 0.061 =C3*83 5000 =B3+03+E3 4 25 =F3 -$C$3 =C4 B4 =$E$3 =B4+04+E4 5 26 F4 -$C$3 -C5 B5 -$E$3 -B5+05+E5 6 27 =F5 =$C$3 =C6*B6 =$E$3 =B6+D6+E6 7 28 =F6 -$C$3 =C7*87 =$E$3 =87+D7+E7 b. In the second part, you need to analyze how your retirement fund balance varies with respect to changes in the Return Rate and the Annual Contribution. Complete the table labeled 'Ending Balance at Age 65 as a Function of Return Rate and Annual Contribution' by creating a two-way Data Table similar to the one created in-class. The table should include return Rate values between 2.5% and 7.5%, and Annual Contribution values between 2,500 and 7,500. Use the Return Rate in cell C3 and the Annual Contribution in cell E3 as the input cells. Reference the Ending Balance at age 65 cell as the table output. Use the data table to answer the following sample questions: • If the return rate is 7.5%, how much do you need to contribute each year in order to have an ending balance of $1,058,793.26? • How much money would you expect to have when you retire if your annual contribution is 3,000 and the return rate is 5.5%? • If you contributed 3,500 each year, would any of the return rates used in the data table result in an ending balance greater than $1,000,000? c. Refer to part a. How much money would you need to contribute each year in order to have an ending balance of 2,000,000 dollars at age 65? Hint: Use the Goal Seek tool like we studied in class. The "Changing Cell" in Goal Seek will be the "Annual Contribution" at age 24. Question 2 1.25 pts If you contributed 4,000 each year, would any of the return rates used in the data table result in an ending balance greater than $1,000,000? yes no 1.25 pts O Question 3 Enter the value in cell A10. Question 4 1.25 pts Use Goal Seek to estimate how much money you would need to contribute each year in order to have an ending balance of 2,000,000 dollars at age 65 (Use a return rate of 6.1% in your calculations. When entering your answer, do not use the $ sign). Question 5 1.25 pts Use the data table to answer the following question: If the return rate is 7.0%, how much do you need to contribute each year in order to have an ending balance of $1,037,845.08? (When entering your answer, do not use the $ sign). Question 6 1.25 pts Use the data table to answer the following question: How much money would you expect to have when you retire if your annual contribution is 3,000 and the return rate is 5.5%? (When entering your answer, do not use the $ sign). Question 7 1.25 pts If you start contributing 5,000 at age 24, how much money would you expect to have in your retirement fund at age 65? (Use a return rate of 6.1% in your calculations. When entering your answer, do not use the $ sign). Question 8 Enter the value in cell S3. 1.25 pts
Expert Answer:
Answer rating: 100% (QA)
Using the formulas given the calculations are as follows Formulas The solution to ... View the full answer
Related Book For
Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science
ISBN: 978-0324656633
5th edition
Authors: Cliff T. Ragsdale
Posted Date:
Students also viewed these management leadership questions
-
Use either Stokes' theorem or the divergence theorem to evaluate each of the following integrals in the easiest possible way. 15. fydx + zdy + xdz, where C is the curve of intersection of the...
-
Assume that you recently graduated and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm's clients is Michelle DellaTorre, a...
-
Lynn Price recently completed her MBA and accepted a job with an electronics manufacturing company. Although she likes her job, she also is looking forward to retiring one day. To ensure that her...
-
As the Developing market of Southern Africa there is endless growth opportunities and constant ask for high growth pushed by the business, this growth comes normally in a very erratic way but as...
-
On March 31, Higgins Repair Service extended an offer of $415,000 for land that had been priced for sale at $460,000. On April 15, Higgins Repair Service accepted the sellers counteroffer of...
-
A car weighing 130 kN when fully loaded is pulled slowly up a steep inclined track by a steel cable (see figure). The cable has an effective cross-sectional area of 490 mm2, and the angle...
-
Conventional accounting systems are said to have some uncontested advantages over the absence of accounting systems. What are these uncontested advantages?
-
Cola Corporation issued its financial statements for the year ended December 31, 2014, on February 25, 2015. The following events took place early in 2015. (a) On January 29, the company purchased...
-
If you were evaluating an investment opportunity, which technique would you use and why? The weighted average cost of capital can consist of debt, preferred stock and equity. Which of these sources...
-
Electra Manufacturing, Inc., produces control valves used in the production of oil field equipment. The control valves are sold to various gas and oil engineering companies throughout the United...
-
Find the Maclaurin series for the function f(x)=- and hence that for 1 1+x 1 1+x f(x)= f(x)= X--+ 3 1 1+x (b) By integrating both sides of the Maclaurin series for . --(-1) (c) Using the Maclaurin...
-
The first of the two steps in building the sequence diagram is to (a) define the purpose and interfaces of the resource objects (b) define how the actor uses the system resources (c) define how the...
-
What is a deployment diagram?
-
How much logic should a sequence diagram include? (a) One use case (b) One user interaction (c) One scenario (d) One actors use of the system
-
Think about both the Solow growth model and the new growth theory. What can a government do in order to enhance the economic performance of its country?
-
What is a component diagram?
-
Use of the economic order quantity determines the reorder point. provides the lowest overall inventory costs. O determines the safety stock. O All of the options are true.
-
6. (Potential Energy and Conservation of Energy) What should be the spring constant k of a spring designed to bring a 1200-kg car to rest from a speed of 95 km/h so that the occupants undergo a...
-
Interstate 81 through southwest Virginia is heavily traveled by long-distance truckers. To cut down on accidents, The Virginia State Patrol carries out random inspections of a trucks weight and the...
-
A real estate developer is planning to build an apartment building specifically for graduate students on a parcel of land adjacent to a major university. Four types of apartments can be included in...
-
Marissa Jones is the president and CEO of Sound's Alive, a company that manufactures and sells a line of speakers, CD players, receivers, high-definition televisions, and other items geared for the...
-
Imagine you are a decision-maker about to allocate millions of dollars to-ward an SoS. The analysts have told you that the SoS configuration they recommend was developed using an agent-based model....
-
Choose one of the items below to complete: a. Prepare an abstraction depiction /paper model and complete pseudo-code that would implement a fire escape ABM for a university class-room. Pseudo-code...
-
Discuss THREE possible reasons why an entitys gross profit margin might increase from one year to the next.
Study smarter with the SolutionInn App