Question

Lindsay is 25 years old and has a new job in web development. She wants to make sure that she is financially sound in 30 years, so she plans to invest the same amount into a retirement account at the end of every year for the next 30 years.

(a)	Construct a data table in Excel that will show Lindsay the balance of her retirement account for various levels of annual investment and return. If Lindsay invests $10,000 at return of 6%, what would be the balance at the end of 20th year in the account?
	If required, round your answers to two decimal places.
	$
(b)	Develop the two-way table in Excel for the balance at the end of 30th year in the account. Consider annual investment amounts of $5000 to $20,000 in increments of $1000, and returns of 0% to 12% in increments of 1%. Note that because Lindsay invests at the end of the year, there is no interest earned on the contribution for the year in which she contributes. Complete the below table.
	If required, round your answers to two decimal places. 1% 2% $5,000 $ $ $6,000 $ $ $7,000 $ $ $8,000 $ $ $9,000 $ $ $10,000 $ $ $11,000 $ $ $12,000 $ $ $13,000 $ $ $14,000 $ $ $15,000 $ $ $16,000 $ $ $17,000 $ $ $18,000 $ $ $19,000 $ $ $20,000 $

Answer 1

a)

Retirement Account Schedule
Year	Opening Balance	Amount Invested	Return	Closing Balance
1	0.00	10,000.00	0.00	10,000.00
2	10,000.00	10,000.00	600.00	20,600.00
3	20,600.00	10,000.00	1,236.00	31,836.00
4	31,836.00	10,000.00	1,910.16	43,746.16
5	43,746.16	10,000.00	2,624.77	56,370.93
6	56,370.93	10,000.00	3,382.26	69,753.19
7	69,753.19	10,000.00	4,185.19	83,938.38
8	83,938.38	10,000.00	5,036.30	98,974.68
9	98,974.68	10,000.00	5,938.48	1,14,913.16
10	1,14,913.16	10,000.00	6,894.79	1,31,807.95
11	1,31,807.95	10,000.00	7,908.48	1,49,716.43
12	1,49,716.43	10,000.00	8,982.99	1,68,699.41
13	1,68,699.41	10,000.00	10,121.96	1,88,821.38
14	1,88,821.38	10,000.00	11,329.28	2,10,150.66
15	2,10,150.66	10,000.00	12,609.04	2,32,759.70
16	2,32,759.70	10,000.00	13,965.58	2,56,725.28
17	2,56,725.28	10,000.00	15,403.52	2,82,128.80
18	2,82,128.80	10,000.00	16,927.73	3,09,056.53
19	3,09,056.53	10,000.00	18,543.39	3,37,599.92
20	3,37,599.92	10,000.00	20,256.00	3,67,855.91
21	3,67,855.91	10,000.00	22,071.35	3,99,927.27
22	3,99,927.27	10,000.00	23,995.64	4,33,922.90
23	4,33,922.90	10,000.00	26,035.37	4,69,958.28
24	4,69,958.28	10,000.00	28,197.50	5,08,155.77
25	5,08,155.77	10,000.00	30,489.35	5,48,645.12
26	5,48,645.12	10,000.00	32,918.71	5,91,563.83
27	5,91,563.83	10,000.00	35,493.83	6,37,057.66
28	6,37,057.66	10,000.00	38,223.46	6,85,281.12
29	6,85,281.12	10,000.00	41,116.87	7,36,397.98
30	7,36,397.98	10,000.00	44,183.88	7,90,581.86
Explanation	=previous year's closing balance		=Opening balance*6%	+opening +investment+interest

Balance at the end of year 20 will be 367,855.91 dollars.

It can be done by using the FV formula also. =FV(0.06,20,10000,0,0)

RATE=interest rate

nper = period/ term

pmt = periodic payment

pv =present value, if any

type = '0' for investment at the end of the year OR '1' for beginning of the year

b)

Return Rate

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

Annual Investment Amount

5000

₹ 1,50,000.00

₹ 1,73,924.46

₹ 2,02,840.40

₹ 2,37,877.08

₹ 2,80,424.69

₹ 3,32,194.24

₹ 3,95,290.93

₹ 4,72,303.93

₹ 5,66,416.06

₹ 6,81,537.69

₹ 8,22,470.11

₹ 9,95,104.39

₹ 12,06,663.42

6000

₹ 1,80,000.00

₹ 2,08,709.35

₹ 2,43,408.48

₹ 2,85,452.49

₹ 3,36,509.63

₹ 3,98,633.09

₹ 4,74,349.12

₹ 5,66,764.72

₹ 6,79,699.27

₹ 8,17,845.23

₹ 9,86,964.14

₹ 11,94,125.27

₹ 14,47,996.11

7000

₹ 2,10,000.00

₹ 2,43,494.24

₹ 2,83,976.55

₹ 3,33,027.91

₹ 3,92,594.56

₹ 4,65,071.93

₹ 5,53,407.30

₹ 6,61,225.50

₹ 7,92,982.48

₹ 9,54,152.77

₹ 11,51,458.16

₹ 13,93,146.15

₹ 16,89,328.79

8000

₹ 2,40,000.00

₹ 2,78,279.13

₹ 3,24,544.63

₹ 3,80,603.33

₹ 4,48,679.50

₹ 5,31,510.78

₹ 6,32,465.49

₹ 7,55,686.29

₹ 9,06,265.69

₹ 10,90,460.31

₹ 13,15,952.18

₹ 15,92,167.02

₹ 19,30,661.47

9000

₹ 2,70,000.00

₹ 3,13,064.02

₹ 3,65,112.71

₹ 4,28,178.74

₹ 5,04,764.44

₹ 5,97,949.63

₹ 7,11,523.68

₹ 8,50,147.08

₹ 10,19,548.90

₹ 12,26,767.85

₹ 14,80,446.20

₹ 17,91,187.90

₹ 21,71,994.16

10000

₹ 3,00,000.00

₹ 3,47,848.92

₹ 4,05,680.79

₹ 4,75,754.16

₹ 5,60,849.38

₹ 6,64,388.48

₹ 7,90,581.86

₹ 9,44,607.86

₹ 11,32,832.11

₹ 13,63,075.39

₹ 16,44,940.23

₹ 19,90,208.78

₹ 24,13,326.84

11000

₹ 3,30,000.00

₹ 3,82,633.81

₹ 4,46,248.87

₹ 5,23,329.57

₹ 6,16,934.32

₹ 7,30,827.32

₹ 8,69,640.05

₹ 10,39,068.65

₹ 12,46,115.32

₹ 14,99,382.92

₹ 18,09,434.25

₹ 21,89,229.66

₹ 26,54,659.53

12000

₹ 3,60,000.00

₹ 4,17,418.70

₹ 4,86,816.95

₹ 5,70,904.99

₹ 6,73,019.25

₹ 7,97,266.17

₹ 9,48,698.23

₹ 11,33,529.44

₹ 13,59,398.53

₹ 16,35,690.46

₹ 19,73,928.27

₹ 23,88,250.54

₹ 28,95,992.21

13000

₹ 3,90,000.00

₹ 4,52,203.59

₹ 5,27,385.03

₹ 6,18,480.40

₹ 7,29,104.19

₹ 8,63,705.02

₹ 10,27,756.42

₹ 12,27,990.22

₹ 14,72,681.74

₹ 17,71,998.00

₹ 21,38,422.29

₹ 25,87,271.41

₹ 31,37,324.90

14000

₹ 4,20,000.00

₹ 4,86,988.48

₹ 5,67,953.11

₹ 6,66,055.82

₹ 7,85,189.13

₹ 9,30,143.87

₹ 11,06,814.61

₹ 13,22,451.01

₹ 15,85,964.96

₹ 19,08,305.54

₹ 23,02,916.32

₹ 27,86,292.29

₹ 33,78,657.58

15000

₹ 4,50,000.00

₹ 5,21,773.37

₹ 6,08,521.19

₹ 7,13,631.24

₹ 8,41,274.07

₹ 9,96,582.71

₹ 11,85,872.79

₹ 14,16,911.79

₹ 16,99,248.17

₹ 20,44,613.08

₹ 24,67,410.34

₹ 29,85,313.17

₹ 36,19,990.27

16000

₹ 4,80,000.00

₹ 5,56,558.26

₹ 6,49,089.27

₹ 7,61,206.65

₹ 8,97,359.00

₹ 10,63,021.56

₹ 12,64,930.98

₹ 15,11,372.58

₹ 18,12,531.38

₹ 21,80,920.62

₹ 26,31,904.36

₹ 31,84,334.05

₹ 38,61,322.95

17000

₹ 5,10,000.00

₹ 5,91,343.16

₹ 6,89,657.35

₹ 8,08,782.07

₹ 9,53,443.94

₹ 11,29,460.41

₹ 13,43,989.17

₹ 16,05,833.37

₹ 19,25,814.59

₹ 23,17,228.16

₹ 27,96,398.39

₹ 33,83,354.92

₹ 41,02,655.63

18000

₹ 5,40,000.00

₹ 6,26,128.05

₹ 7,30,225.43

₹ 8,56,357.48

₹ 10,09,528.88

₹ 11,95,899.26

₹ 14,23,047.35

₹ 17,00,294.15

₹ 20,39,097.80

₹ 24,53,535.69

₹ 29,60,892.41

₹ 35,82,375.80

₹ 43,43,988.32

19000

₹ 5,70,000.00

₹ 6,60,912.94

₹ 7,70,793.50

₹ 9,03,932.90

₹ 10,65,613.82

₹ 12,62,338.10

₹ 15,02,105.54

₹ 17,94,754.94

₹ 21,52,381.01

₹ 25,89,843.23

₹ 31,25,386.43

₹ 37,81,396.68

₹ 45,85,321.00

20000

₹ 6,00,000.00

₹ 6,95,697.83

₹ 8,11,361.58

₹ 9,51,508.31

₹ 11,21,698.76

₹ 13,28,776.95

₹ 15,81,163.72

₹ 18,89,215.73

₹ 22,65,664.22

₹ 27,26,150.77

₹ 32,89,880.45

₹ 39,80,417.56

₹ 48,26,653.69

The formula in first cell B3 will be=-FV(B$1,30,$A3,0,0) . Drag and drop to all other cells. there is your solution for the balance at the end of 30^th year in the account for each amount of annual investment at different interest rates.