Question

urse Home Calendar Course Content Communicate ReportsSubmission Review Table of Contents 2-Financial Analysis and Time Value of Money Module 2 Discussion Module 2 Discussion Gr Bella is 23 years old and wants to invest money for her retirement. She wants to have $2,000,000 saved up when she retires at age 65. a) If she can earn 10% per year in an equity mutual fund, calculate the amount of money she would have to invest in equal annual amounts to achieve her retirement goal. b) Alternatively how much would she have to invest in equal monthly amounts starting at the end of the current year or month respectively. c) Looking at these numbers, most people would think this is affordable. Why do you think most Americans are not saving for their retirement? Discuss what you believe to be the real reason most 23 year olds (like Bella) are not saving for retirement. What do you think we can do to change this trend? Provide your work in Excel for parts al and b). Write 100-200 words discussing part c). O Type here to search

need steps in excel as well as showing work

Answer 1

We use excel pv and pmt formulae to solve the part a and b. The formulae is below:

Pv(rate,nper,pmt,fv,type)

Pmt(rate,nper,pv,fv,type)

c) Yes looking at the numbers it looks affordable but the real problem is mindset as many people start very later to prepare for their retirement by which the annual and monthly amount will rise . If you start as early as your carrer starts by investing less amount we can achieve out retirement goals. The main reasons why they are not savings is spending more than required amount by which they feel no money left for savings, Do not have idea where and how to invest, thinking that government pension will take care. The changes that needs to be done are more awareness needs to be created by videos and conducting motivation classes during graduate and post graduate courses time itself.