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.

Answer 1

Answer:-

Given that:-

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 Lindsay invests $10,000 per year at the rate of 6% return for the next 30 years, then the compound balance at the end of the 20 th year would be, where , n=1 means the money that is kept at the beginning of the 20 th year , n=2 means the money kept at the beginning of the 19th year and so on , i.i.., n repersents the period for which the amount is accumulating in the bank Therefore , the value could be calculated according to the following table.. Year n sum 20 1 10600 19 2 11236 18 3 11910.16 17 4 12624.77 16 5 13382.26 15 6 14185.19 14 7 15036.3 13 8 15938.48 12 9 16894.79 11 10 17908.48 10 11 18982.99 9 12 20121.96 8 13 21329.28 7 14 22609.04 6 15 23965.58 5 16 25403.52 4 17 26927.73 3 18 28543.39 2 19 30256 1 29 32071.35 Total 3899273 Therefre , the total amount accumulated at the end of 20th year would be , $389,927.30 According to the above stated formula we could find out the balance that Lindsay would accumulated at the end of nth year based on different return rates.