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Sheet 3- Time Comparison 1. At the bottom of the page, click on Sheet 3. If you're using Google Sheets, you can add a 3rd sheet. Rename it "Time Comparison". On this sheet, we're going to look at two individuals that are paying into annuities for their retirement fund. We want to pay close attention to when each of these men start paying into their annuity. 2. Type "Age - stats of saving" in cell A2. 3. Type "Payment Amount (P)" in cell A3. 4. Type "Rate (1)" in cell A4. 5. Type "Number of Payments per year (n)" in cell AS. 6. Type "Years to retire at 65 (t)" in cell A6. Again, find some reasonable values for payment amount, interest rate, and number of payments. 7. In cell B1, type "Tommy". Then enter his age, "45", in cell 82. 8. In cell C1, type "Sammy". Then enter his age, "25", in cell C2. a. NOTE: Pick whichever names you'd like. 9. Enter the amounts you chose for payment, rate, and frequency in cells 83 thru B5. These amounts should be the same for C3 thru CS. 10. For cells 86 and C6, we're going to calculate the time period of the annuity. To do this, input "65-82", and hit Enter for Tommy's time value. And, "65-C2" for Sammy's time value. Notice the difference in time period. Now, we will calculate the Future Value of each annuity. 11. Type "Future Value (FV)" in cell A8. 12. In cell 8, Input "aB3 (1+(84/85))^(85 86)-1)/(84/85)". Hit Enter. 13. Now input "C3 (1+(C4/CS))^CS C6)-1)/(C4/C5)" in cell C8 for Sammy's retirement amount. Hit Enter and compare the 2 retirement funds.

Sheet 3- Time Comparison 1. At the bottom of the page, click on Sheet 3. If you're using Google Sheets, you can add a 3rd sheet. Rename it "Time Comparison". On this sheet, we're going to look at two individuals that are paying into annuities for their retirement fund. We want to pay close attention to when each of these men start paying into their annuity. 2. Type "Age - stats of saving" in cell A2. 3. Type "Payment Amount (P)" in cell A3. 4. Type "Rate (1)" in cell A4. 5. Type "Number of Payments per year (n)" in cell AS. 6. Type "Years to retire at 65 (t)" in cell A6. Again, find some reasonable values for payment amount, interest rate, and number of payments. 7. In cell B1, type "Tommy". Then enter his age, "45", in cell 82. 8. In cell C1, type "Sammy". Then enter his age, "25", in cell C2. a. NOTE: Pick whichever names you'd like. 9. Enter the amounts you chose for payment, rate, and frequency in cells 83 thru B5. These amounts should be the same for C3 thru CS. 10. For cells 86 and C6, we're going to calculate the time period of the annuity. To do this, input "65-82", and hit Enter for Tommy's time value. And, "65-C2" for Sammy's time value. Notice the difference in time period. Now, we will calculate the Future Value of each annuity. 11. Type "Future Value (FV)" in cell A8. 12. In cell 8, Input "aB3 (1+(84/85))^(85 86)-1)/(84/85)". Hit Enter. 13. Now input "C3 (1+(C4/CS))^CS C6)-1)/(C4/C5)" in cell C8 for Sammy's retirement amount. Hit Enter and compare the 2 retirement funds.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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10:21 Exploring Annuities [DIR... • Sheet 3- Time Comparison 1. At the bottom of the page, click on Sheet 3. If you're using Google Sheets, you can add a 3rd sheet. Rename it "Time Comparison". On this sheet, we're going to look at two individuals that are paying into annuities for their retirement fund. We want to attention to when eac. these paying into their annuity. 2. Type "Age - stats of saving" in cell A2. 3. Type "Payment Amount (P)" in cell A3. 4. Type "Rate (i)" in cell A4. 5. Type "Number of Payments per year (n)" in cell A5. 6. Type "Years to retire at 65 (t)" in cell A6. Again, find some reasonable values for payment amount, interest rate, and number of payments. 7. In cell B1, type "Tommy". Then enter his age, "45", in cell B2. 8. In cell C1, type "Sammy". Then enter his age, "25", in cell C2. a. NOTE: Pick whichever names you'd like. 9. Enter the amounts you chose for payment, rate, and frequency in cells B3 thru B5. These amounts should be the same for C3 thru CS. 10. For cells B6 and C6, we're going to calculate the time period of the annuity. To do this, input "=65-82", and hit Enter for Tommy's time value. And, "=65-C2" for Sammy's time value. Notice the difference in time period. Now, we will calculate the Future Value of each annuity. 11. Type "Future Value (FV)" in cell A8. 12. In cell B8, Input "=B3*(1+(84/B5)^(85* 86)-1)/(B4/B5)". Hit Enter. 13. Now input "C3* ((1+(C4/C5))^(C5*C6)-1)/(C4/C5)y" in cell C8 for Sammy's retirement amount. Hit Enter and compare the 2 retirement funds. Dashboard Calendar To Do Notifications Inbox
Transcribed Image Text:10:21 Exploring Annuities [DIR... • Sheet 3- Time Comparison 1. At the bottom of the page, click on Sheet 3. If you're using Google Sheets, you can add a 3rd sheet. Rename it "Time Comparison". On this sheet, we're going to look at two individuals that are paying into annuities for their retirement fund. We want to attention to when eac. these paying into their annuity. 2. Type "Age - stats of saving" in cell A2. 3. Type "Payment Amount (P)" in cell A3. 4. Type "Rate (i)" in cell A4. 5. Type "Number of Payments per year (n)" in cell A5. 6. Type "Years to retire at 65 (t)" in cell A6. Again, find some reasonable values for payment amount, interest rate, and number of payments. 7. In cell B1, type "Tommy". Then enter his age, "45", in cell B2. 8. In cell C1, type "Sammy". Then enter his age, "25", in cell C2. a. NOTE: Pick whichever names you'd like. 9. Enter the amounts you chose for payment, rate, and frequency in cells B3 thru B5. These amounts should be the same for C3 thru CS. 10. For cells B6 and C6, we're going to calculate the time period of the annuity. To do this, input "=65-82", and hit Enter for Tommy's time value. And, "=65-C2" for Sammy's time value. Notice the difference in time period. Now, we will calculate the Future Value of each annuity. 11. Type "Future Value (FV)" in cell A8. 12. In cell B8, Input "=B3*(1+(84/B5)^(85* 86)-1)/(B4/B5)". Hit Enter. 13. Now input "C3* ((1+(C4/C5))^(C5*C6)-1)/(C4/C5)y" in cell C8 for Sammy's retirement amount. Hit Enter and compare the 2 retirement funds. Dashboard Calendar To Do Notifications Inbox
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