Question

You want to retire in 30 years, you estimate that you need to accumulate $500,000. You plan to make equal, end-of-year deposits into an account earning 10 percent, annual compounding? How large must the annual deposits be to create the $500,000 fund in 30 years? If you can afford to deposit only $6000 per year into the account, how much will you have accumulated in 30 years? How large must the annual deposits be to create the $500,000 fund by the end of 30 years? Number of years Annual interest rate Future value Annual deposit If you can afford to deposit only $600 per year into the account, how much will you have accumulated by the end of the forty-second year? Annual deposit Future value

Answer 1

e fic =PMT(C2,C3,C4,-C5,C6) в 1 2 RATE 3 NPER 4 PV 5 FV 6 TYPE PMT Rate Per Period Total No.of Payments Present Value Future value Endingo), Beginning(1) Payment per period (PMT(rate,nper,pv,-fv,type)) 5000001 $3,039.62 IPMT(0.1,30,0,-500000,0) 9

c7 - f --FV(C2,C3,C4,C5, C6) 1 $6,000.00 2 RATE(1/Y) Rate Per Period 3 NPER Total No.of Payments 4 PMT Payment per period Present Value 6 TYPE Ending(0), Beginning(1) 7 FV Future value 8 (-FV(rate,nper,pmt,pv, type)) 5 PV 986,964.14 |(-FV(0.1,30,6000,0,0))

C7 for --FV(C2,C3,C4,C5,C6) $600.00 2 RATE(1/Y) Rate Per Period 3 NPER Total No.of Payments 4. PMT Payment per period Present Value 6 TYPE Ending(0), Beginning(1) 7 FV Future value 8 (-FV(rate,nper,pmt,pv,type)) 5 PV 322,582.20 (-FV(0.1,42,600,0,0))