Question

In: Finance

Create an Excel spreadsheet that projects your savings balances every year until retirement, and the income you can generate in retirement from your savings.

Create an Excel spreadsheet that projects your savings balances every year until retirement, and the income you can generate in retirement from your savings.

Include columns for 1. years; 2. savings balance; 3. investment returns; 4. annual new savings (investment) from your salary. Note that each year's balance equals the prior year's balance plus investment returns, plus additional savings. See below:

Interest Rate5.00%

Annual Savings6,000.00





YearBalanceReturnsAnnual Savings
2020500.0025.006,000.00
20216,525.00326.256,000.00
202212,851.25642.566,000.00
::

[Retirement Year]770,734.57





Retirement Annuity50,137.39

Solutions

Expert Solution

In order to plan this retirement project , we do the following operations,

The Retirement chart is constructed in excel as per the required coloums

Years

Savings Balance / BALANCE

Investment returns

Annual New Savings (Investment)

Closing Balance

The Balance in the opening was 500 and the returns are calculated on a 5% apr as has been given

Investment returns

Formula =B3*$B$1

Annual Savings is fixed at 6000

Closing Balance

Closing balance is given as the sum of all the components

=B3+C3+D3

The Retirement plan is as follows

Return

5%

Years

Savings Balance / BALANCE

Investment returns

Annual New Savings (Investment)

Closing Balance

2020

500

25

6000

6525

2021

6525

326.25

6000

12851.25

2022

12851.25

642.5625

6000

19493.8125

2023

19493.8125

974.690625

6000

26468.5031

2024

26468.50313

1323.425156

6000

33791.9283

2025

33791.92828

1689.596414

6000

41481.5247

2026

41481.5247

2074.076235

6000

49555.6009

2027

49555.60093

2477.780047

6000

58033.381

2028

58033.38098

2901.669049

6000

66935.05

2029

66935.05003

3346.752501

6000

76281.8025

2030

76281.80253

3814.090126

6000

86095.8927

2031

86095.89265

4304.794633

6000

96400.6873

2032

96400.68729

4820.034364

6000

107220.722

2033

107220.7216

5361.036082

6000

118581.758

2034

118581.7577

5929.087887

6000

130510.846

The target retirement balance of 770,734.57 was calculated in the Retirement year 2060 as follows

2058

649450.0134

32472.50067

6000

687922.514

2059

687922.5141

34396.12571

6000

728318.64

2060

728318.6398

36415.93199

6000

770734.572

Excel

Hence the retirement plan is constructed with the excel as follows

jeff jeffy answered 3 years ago
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