You have decided to start saving for retirement. You plan to work for 35 years and then retire. Requirements: Complete each requirement on a separate worksheet. 1. Calculate the amount of money that will be in your Roth IRA account when you retire if you: a. Save $3,500 at the end of each year. b. Earn 7% interest each year. c. The answer to requirement I must be calculated using a single formula. 2. Create a one-input Data Table that calculates the value of your Roth IRA when you retire if the annual savings amount is different than $3,500 per year. a. Use the following annual end of the year annual savings amounts as the column data in the Data Table: $500, $1,000, $2,000, $3,000, $3,500, $4,000, and $5,000. b. The annual interest rate is still 7% each year. 3. Create a two-input Data Table that calculates the value of your Roth IRA when you retire for different annual interest rates and different annual savings amounts. a. Use the following annual interest rates as the column data in the Data Table: 1%, 3%, 5%, 7%, 9%, 11%, and 13%. b. Use the following annual end of the year annual savings amounts as the row data in the Data Table: $2,000, $3,000, $3,500, $4,000, and $5,000.
You have decided to start saving for retirement. You plan to work for 35 years and then retire. Requirements: Complete each requirement on a separate worksheet. 1. Calculate the amount of money that will be in your Roth IRA account when you retire if you: a. Save $3,500 at the end of each year. b. Earn 7% interest each year. c. The answer to requirement I must be calculated using a single formula. 2. Create a one-input Data Table that calculates the value of your Roth IRA when you retire if the annual savings amount is different than $3,500 per year. a. Use the following annual end of the year annual savings amounts as the column data in the Data Table: $500, $1,000, $2,000, $3,000, $3,500, $4,000, and $5,000. b. The annual interest rate is still 7% each year. 3. Create a two-input Data Table that calculates the value of your Roth IRA when you retire for different annual interest rates and different annual savings amounts. a. Use the following annual interest rates as the column data in the Data Table: 1%, 3%, 5%, 7%, 9%, 11%, and 13%. b. Use the following annual end of the year annual savings amounts as the row data in the Data Table: $2,000, $3,000, $3,500, $4,000, and $5,000.
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
Problem 1PS
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Transcribed Image Text:Part 1: Data Tables
You have decided to start saving for retirement. You plan to work for 35 years and then retire.
Requirements: Complete each requirement on a separate worksheet.
1. Calculate the amount of money that will be in your Roth IRA account when you retire if
you:
a. Save $3,500 at the end of each year.
b.
Earn 7% interest each year.
c. The answer to requirement I must be calculated using a single formula.
2. Create a one-input Data Table that calculates the value of your Roth IRA when you retire
if the annual savings amount is different than $3,500 per year.
a. Use the following annual end of the year annual savings amounts as the column
data in the Data Table: $500, $1,000, $2,000, $3,000, $3,500, $4,000, and $5,000.
b. The annual interest rate is still 7% each year.
3. Create a two-input Data Table that calculates the value of your Roth IRA when you retire
for different annual interest rates and different annual savings amounts.
a. Use the following annual interest rates as the column data in the Data Table: 1%,
3%, 5%, 7%, 9%, 11%, and 13%.
b. Use the following annual end of the year annual savings amounts as the row data
in the Data Table: $2,000, $3,000, $3,500, $4,000, and $5,000.
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Step 1: Explain the concept of retirement planning
VIEWStep 2: 1. Calculate the amount of money in the IRA when the investor retires.
VIEWStep 3: 2. Create a one-input data table to calculate the future amount at different levels of savings.
VIEWStep 4: 3. Create a 2-input data table to calculate amount at different levels of savings & interest rates.
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