Lindsay is 25 years old and has a new job in web development. Lindsay wants to m

Question

Lindsay is 25 years old and has a new job in web development. Lindsay wants to make sure 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.

(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. 4% 5% $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 $ $

Explanation / Answer

Future value of annuity immediate = A [ ( 1+r)n -1] / r

where A = annuity / annual deposit /payment

r = rate of interest

Amount Invested 4% 5% $5,000 $280,424.69 $332,194.24 $6,000 $336,509.63 $398,633.09 $7,000 $392,594.56 $465,071.93 $8,000 $448,679.50 $531,510.78 $9,000 $504,764.44 $597,949.63 $10,000 $560,849.38 $664,388.48 $11,000 $616,934.32 $730,827.32 $12,000 $673,019.25 $797,266.17 $13,000 $729,104.19 $863,705.02 $14,000 $785,189.13 $930,143.87 $15,000 $841,274.07 $996,582.71 $16,000 $897,359.00 $1,063,021.56 $17,000 $953,443.94 $1,129,460.41 $18,000 $1,009,528.88 $1,195,899.26 $19,000 $1,065,613.82 $1,262,338.10 $20,000 $1,121,698.76 $1,328,776.95

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