Question

Excel Online Structured Activity: Required annuity payments Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a foxed retirement income that has the same purchasing power at the time he retires as $35,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $165,000 saved, and he expects to earn 9% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round your intermediate calculations. Round your answer to the nearest cent Check My Work Reset Pro

Answer 1

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X 2 E. Insert = Page Layout PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins File Home Formulas Data - 2x % Cut A = = = V General Wrap Text Merge & Center - Σ AutoSum : A Fill 2 Sort & $ :.: % , Number 2 Clear Formatting as Table Styles Styles Filter Editing Find & Select Alignment Cells E F G H 35000 Calibri 11 A E Copy Paste Format Painter BI U D- DA Clipboard Font A1 for A 1 2. 3 retirement income today 4 years to retirement 5 years of retirement 6 inflation rate 7 savings 8 rate of return 9 10 calculate value of savings in 10 years 11 savings at t=10 10 25 5% 165000 9% 390615.01 [=FV(B8,B4,,-B7)] 12 57011.31 [=B3*(1+B6)^B4] 13 calculate value of fixed retirement income in 10 years 14 retirement income at t=10 15 16 calculate value of 25 begiining of year retirement payments at t=10 17 retirement payments at t=10 18 19 calculate net amount needed at t=10 N EXPONPER APR CPI ear FVA pva 52 53 STATE 56 57 58 59 Rea ferences 610397.98 [=PV(B8,B5,-B14)] I 54 S1 MORTGAGE 55 52 511 312 313 314 315 316 317F 51 s18f S111 Sheet1 < BOU 130% > O- ELEB * * QENG 22-11-2019

X 2 E. Insert = Page Layout PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins File Home Formulas Data - 2x % Cut Calibri A = = = V General 11 A D- DA Wrap Text Merge & Center - Σ AutoSum : A Fill 2 Sort & m Find & BI U $ :.: % , Number E Copy Paste Format Painter Clipboard A27 2 Clear Formatting as Table Styles Styles Filter Editing Select Font Alignment Cells А F G H 9 10 calculate value of savings in 10 years 11 savings at t=10 390615.01 [=FV(B8,B4,,-B7)] 12 57011.31 [=B3*(1+B6)^B4] 610397.98 [=PV(B8,85,-B14)] 13 calculate value of fixed retirement income in 10 years 14 retirement income at t=10 15 16 calculate value of 25 begiining of year retirement payments at t=10 17 retirement payments at t=10 18 19 calculate net amount needed at t=10 20 value of retirement payments 21 value of savings 22 net amount needed 23 calculate annual savings needed for next 10 years 24 annual savings needed for retirement 25 26 27 HOM EXPONPER APR CPI ear FVA pva 52 53 STATE 56 57 58 59 Rea ferences 610397.98 390615.01 219782.98 [=B17] [=B11] [=B20-B21] OR (=B17-B11] 14466.14 (=PMT(B8,B4,,-B22)] 54 S1 MORTGAGE 55 52 511 312 313 314 315 316 317F si > O- si8f S111 Sheet1 < BOU 130% 9 . * O ENG . B 22-11-2019