Question

Future value of a portfolio. Rachel and Richard want to know when their current portfolio will be sufficient for them to retire. They have the following balances in their portfolio:

Money market account (MM):

$39,000

Government bond mutual fund (GB):

$125,000

Large capital mutual fund (LC):

$104,000

Small capital mutual fund (SC):

$73,000

Real estate trust fund (RE):

$85,000

Rachel and Richard believe they need at least

$1,600,000 to retire. The money market account grows at

2.5 % annually, the government bond mutual fund grows at

6.0 %annually, the large capital mutual fund grows at

9.0 %annually, the small capital mutual fund grows at

12.0 % annually and the real estate trust fund grows at

5.0 % annually. With the assumption that no more funds will be deposited into any of these accounts, how long will it be until they reach the

$1,600,000 goal?

Rachel and Richard will need to invest their accounts for ？？？？？？years to reach$1,600,000. (Round to the nearest whole number.)

Answer 1

Year		MM	GB	LC	SC	RE	Total
	Growth Rate	2.50%	6%	9%	12%	5%	[Target 1600000]
	Current Balance	39000	125000	104000	73000	85000	426000
1		39975	132500	113360	81760	89250	456845
2		40974.38	140450	123562.4	91571.2	93712.5	490270.5
3		41998.73	148877	134683	102559.7	98398.13	526516.6
4		43048.7	157809.6	146804.5	114866.9	103318	565847.8
5		44124.92	167278.2	160016.9	128650.9	108483.9	608554.9
6		45228.04	177314.9	174418.4	144089.1	113908.1	654958.5
7		46358.74	187953.8	190116.1	161379.7	119603.5	705411.9
8		47517.71	199231	207226.5	180745.3	125583.7	760304.3
9		48705.66	211184.9	225876.9	202434.7	131862.9	820065.1
10		49923.3	223856	246205.8	226726.9	138456	885168
11		51171.38	237287.3	268364.3	253934.1	145378.8	956136
12		52450.66	251524.6	292517.1	284406.2	152647.8	1033546
13		53761.93	266616	318843.7	318535	160280.2	1118037
14		55105.98	282613	347539.6	356759.2	168294.2	1210312
15		56483.63	299569.8	378818.2	399570.3	176708.9	1311151
16		57895.72	317544	412911.8	447518.7	185544.3	1421415
17		59343.11	336596.6	450073.9	501221	194821.6	1542056
18		60826.69	356792.4	490580.5	561367.5	204562.6	1674130
19		62347.36	378199.9	534732.8	628731.6	214790.8	1818802
20		63906.04	400891.9	582858.7	704179.4	225530.3	1977366
At the end of 18th year they may retire as the target balance is achieved
Note -	How to fill The table -
	Example -	Year 1 MM
		= Upper cell x Interest rate Factor
		i.e. 39000*(1.025)
		Now Drag the cell to the whole column
	Do the same for other securities and add a total column at last.
Please provide feedback…. Thanks in advance…. :-)