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.

(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 $15,000 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.

Explanation / Answer

The table below is an excel table which inputs annual investment in the cell C3. Let this amount be A and annual return % in the cell C4. Let the % annual return be R%.

Then the value of the total investment ( balance ) at the end of an year X i.e. Px is calculated as A+Px-1*(1+R)

For example investment at the end of the first year is 15000 in cell C6. Then investment for second year in C7 would be $C$3+C6*(1+$C$4)

Also from the table we get the balance at the end of 12th year is 551783.87 ( given the annual investment is 15000 and annual return is 6% )

Investment= 15000 Return = 6% Year-i Invetment Value at end of year i 1 15000.00 2 30900.00 3 47754.00 4 65619.24 5 84556.39 6 104629.78 7 125907.56 8 148462.02 9 172369.74 10 197711.92 11 224574.64 12 253049.12 13 283232.07 14 315225.99 15 349139.55 16 385087.92 17 423193.20 18 463584.79 19 506399.88 20 551783.87 21 599890.90 22 650884.35 23 704937.42 24 762233.66 25 822967.68 26 887345.74 27 955586.49 28 1027921.67 29 1104596.97 30 1185872.79

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