Question

Brian just graduated from engineering school and landed a sweet job earning $59000 per year. He expects his salary to increase by 6.0% per year. At the end of each year he will invest 10% of his salary into an investment account that earns 6.9.% per year compounded annually. He hopes to retire in 45 years. If all goes according to his plan, how much money will be in his retirement account when he retires? $  

After working for almost a year Brian decides he would rather spend Christmas in Mexico then put money in his retirement account. Each year he finds something else he wants to do with his retirement money until 15 years have passed and he realizes he has zero savings. Sure enough his salary increased by exactly what he had predicted over 15 years. He vows to start putting 10% of his salary away each year from then on. If all goes according to plan how much will be in his account after 30 more years when he reaches the age he would like to retire?

Brian is sad when he realizes how far he has fallen behind in his retirement planning. He decides to buy a lottery ticket hoping that he can use the winnings to put him back on track for his original retirement prediction. How much does he need to win and invest at the end of his 15th year working in order to get back to where he would have been if he had followed his original plan?

Answer 1

Answer:

PV	no. of years	salary growth %	!0% of salary	interest	FV of interest
59000	45	6.00%	5,900.00	6.90%	1,18,808.84	45.00
62540			6,254.00		1,17,808.58	44
66292.4			6,629.24		1,16,816.74	43
70269.944			7,026.99		1,15,833.25	42
74486.14064			7,448.61		1,14,858.04	41
78955.3090784			7,895.53		1,13,891.04	40
83692.627623104			8,369.26		1,12,932.18	39
88714.1852804903			8,871.42		1,11,981.39	38
94037.0363973197			9,403.70		1,11,038.61	37
99679.2585811589			9,967.93		1,10,103.77	36
105660.014096028			10,566.00		1,09,176.80	35
111999.61494179			11,199.96		1,08,257.63	34
118719.591838298			11,871.96		1,07,346.20	33
125842.767348595			12,584.28		1,06,442.44	32
133393.333389511			13,339.33		1,05,546.29	31		PV	no. of years	salary growth %	!0% of salary	interest	FV of interest
141396.933392882			14,139.69		1,04,657.69	30		112827.736805363		11282.7736805363	6.90%	83511.6439631166	30
149880.749396455			14,988.07		1,03,776.57	29		117679.329487993		11767.9329487993		81480.4907890839	29
158873.594360242			15,887.36		1,02,902.87	28		122739.540655977		12273.9540655977		79498.7389083391	28
168406.010021857			16,840.60		1,02,036.52	27		128017.340904184		12801.7340904184		77565.1867927013	27
178510.370623168			17,851.04		1,01,177.46	26		133522.086563064		13352.2086563064		75678.6621373128	26
189220.992860558			18,922.10		1,00,325.64	25		139263.536285276		13926.3536285276		73838.0211498758	25
200574.252432192			20,057.43		99,480.99	24		145251.868345543		14525.1868345543		72042.1478571754	24
212608.707578123			21,260.87		98,643.45	23		151497.698684401		15149.7698684401		70289.9534284695	23
225365.23003281			22,536.52		97,812.97	22		158012.09972783		15801.209972783		68580.3755153356	22
238887.143834779			23,888.71		96,989.47	21		164806.620016127		16480.6620016127		66912.3776075725	21
253220.372464866			25,322.04		96,172.91	20		171893.30467682		17189.330467682		65284.9484047691	20
268413.594812758			26,841.36		95,363.22	19		179284.716777924		17928.4716777924		63697.1012031563	19
284518.410501523			28,451.84		94,560.35	18		186993.959599374		18699.3959599374		62147.8732973733	18
301589.515131615			30,158.95		93,764.24	17		195034.699862147		19503.4699862147		60636.3253967824	17
319684.886039512			31,968.49		92,974.83	16		203421.19195622		20342.119195622		59161.5410559813	16
338865.979201882			33,886.60		92,192.07	15		212168.303210337		21216.8303210337		57722.626119166	15
359197.937953995			35,919.79		91,415.89	14		221291.540248382		22129.1540248382		56318.7081780076	14
380749.814231235			38,074.98		90,646.26	13		230807.076479062		23080.7076479062		54948.9360427147	13					He need to win in lotery after 15 years
403594.803085109			40,359.48		89,883.10	12		240731.780767662		24073.1780767662		53612.4792259601	12
427810.491270216			42,781.05		89,126.36	11		251083.247340671		25108.3247340671		52308.5274393605	11
453479.120746429			45,347.91		88,376.00	10		261879.82697632		26187.982697632		51036.2901022012	10
480687.867991215			48,068.79		87,631.96	9		273140.659536302		27314.0659536302		49794.9958621102	9
509529.140070687			50,952.91		86,894.18	8		284885.707896363		28488.5707896363		48583.892127391	8
540100.888474929			54,010.09		86,162.61	7		297135.793335906		29713.5793335906		47402.2446107285	7			2672548.96045257		361072.583893288
572506.941783425			57,250.69		85,437.20	6		309912.63244935		30991.263244935		46249.3368839942	6
606857.35829043			60,685.74		84,717.89	5		323238.875644672		32323.8875644672		45124.4699438784	5
643268.799787856			64,326.88		84,004.65	4		337138.147297393		33713.8147297393		44026.9617880871	4
681864.927775127			68,186.49		83,297.40	3		351635.087631181		35163.5087631181		42956.1470018474	3
722776.823441635			72,277.68		82,596.12	2		366755.396399322		36675.5396399322		41911.3763544685	2
766143.432848133			76,614.34		81,900.73	1		382525.878444492		38252.5878444492		40892.0164057162	1
					44,65,763.36							1793214.39559268