1. Download the "Retirement" excel spreadsheet on Laulima, in the main Resources folder. (a) Describe Sue's savings profile and compare it to Joe's. Why does Sue end up with a substantially larger retirement nest egg than does Joe, even though she saves a lot less? (b) If Sue stopped saving at age 40, the age Joe starts saving, how much less would she have when she retires at age 65? What if she stopped saving at age 30? What if she continued saving all the way to age 65? (Change the spreadsheet to obtain the answers.) (c) Go back to the original spreadsheet and change the interest rate to different values, both smaller and larger than the given 8%. Consider at least 5 different interest rates. Report what you find. How do different interest rates affect total accumulation of savings for Joe and Sue. Make small table summarizing the results. 1 Sue saves $5000 per year starting at age 20. saving a total of 230,000 by age 65 2 Joe waits until age 40, and then saves $10000 per year, saving a total of $260,000 by age 65 3 With an interest rate of 8%, how big are their nest eggs at age 65? 8 4 5 Interest rate: 0.08 6 Sue Joe 7 Age Contribution Interest Balance Age Contribution Interest Balance 8 20 5000 $ 200 $ 5.200 20 9 21 5000 $ 616 $ 10,816 21 10 22 5000 $ 1,065 $ 16,881 22 11 23 5000 $ 1551 $ 23.432 23 12 24 5000 $ 2,075$ 30,506 24 13 25 5000 $ 2,641 $ 38,147 25 14 26 5000 $ 3,252 $ 46,399 26 15 27 5000 $ 3,912 $ 55,310 27 16 28 5000 $ 4,625 $ 64.935 29 17 29 5000 $ 5,395 $ 75,330 29 18 30 5000 $ 6,226 $ 86,557 30 19 31 5000 $ 7,125 $ 98,681 31 20 32 5000 $ $ 8,094 $ 111,776 32 21 33 5000 $ 9,142 $ 125,918 33 22 34 5000 $ 10,273 $ 141,191 34 23 35 5000 $ 11,495 $ 157,686 35 24 36 5000 $ 12,815 $ 175,501 36 25 37 5000 $ 14,240 $ 194,741 37 26 38 5000 $ 15,779 $ 215,521 38 27 39 5000 $ 17.442 $ 237,962 39 28 40 5000 $ 19,237 $ 262,199 40 10000 $ 400 $ 10,400 29 41 5000 $ 21.176 $ 288,375 41 10000 $ 1232 $ 21.632 30 42 5000 $ 23,270 $ 316,645 42 10000 $ 2,131 $ 33,763 31 43 5000 $ 25,532 $ 347,177 43 10000 $ 3,101 $ 32 44 5000 $ 27,974 $ 380,151 44 10000 $ 4,149 61,013 33 45 5000 $ 30,612 $ 415,763 45 10000 $ 5,281 $ 76,294 34 46 5000 $ 33.461 $ 454 224 46 10000 $ 6,503 $ 92,797 35 47 5000 $ 36,538 $ 495,762 47 10000 $ 7,824 $ 110,621 36 48 5000 $ 39,861 $ 540,623 48 10000 $ 9,250 $ 129,871 37 49 5000 $ 43,450 $ 589,073 49 10000 $ 10,790 $ 150,660 38 50 5000 $ 47,326 $ 641,399 50 10000 $ 12,453 $ 173,113 39 51 5000 $ 51,512 $ 697,910 51 10000 $ 14,249 $ 197,362 40 52 5000 $ 56,033 $ 758,943 52 10000 $ 16,189 $ 223,551 41 53 5000 $ 60,915$ 824,859 53 10000 $ 18.284 $ 251835 42 54 5000 $ 66,189 $ 896,047 54 10000 $ 20,547 $ 282,382 43 55 5000 $ 71,884 $ 972,931 55 10000 $ 22,991 $ 315,373 44 56 5000 $ 78,034 $1,055,966 56 10000 $ 25,630 $ 351002 45 57 5000 $ 84,677 $ 1,145,643 57 10000 $ 28,480 $ 389,483 46 58 5000 $ 91,851 $ 1,242,494 58 10000 $ 31,559 $ 47 59 5000 $ 99,600 $ 1,347,094 59 10000 $ 34,883 $ 475,924 48 60 5000 $ 107,968 $ 1,460,061 60 10000 $ 38,474 $ 524,398 49 61 5000 $ 117,005 $1,582,066 61 10000 $ 42,352 $ 576,750 50 62 5000 $126,765 $ 1,713,832 62 10000 $46,540 $ 633,290 51 63 5000 $ 137,307 $ 1,856,138 63 10000 $ 51,063 $ 694,353 52 64 5000 $ 148,691 $ 2,009,829 64 10000 $ 55,948 55,948 $ 760,302 53 65 5000 $ 160.986 $ 2,175,816 65 10000 $ 61,224 $ 831526 54 55 Total Sav. $ 230,000.00 $ 260,000.00 $ 46,864 431,041 1. Download the "Retirement" excel spreadsheet on Laulima, in the main Resources folder. (a) Describe Sue's savings profile and compare it to Joe's. Why does Sue end up with a substantially larger retirement nest egg than does Joe, even though she saves a lot less? (b) If Sue stopped saving at age 40, the age Joe starts saving, how much less would she have when she retires at age 65? What if she stopped saving at age 30? What if she continued saving all the way to age 65? (Change the spreadsheet to obtain the answers.) (c) Go back to the original spreadsheet and change the interest rate to different values, both smaller and larger than the given 8%. Consider at least 5 different interest rates. Report what you find. How do different interest rates affect total accumulation of savings for Joe and Sue. Make small table summarizing the results. 1 Sue saves $5000 per year starting at age 20. saving a total of 230,000 by age 65 2 Joe waits until age 40, and then saves $10000 per year, saving a total of $260,000 by age 65 3 With an interest rate of 8%, how big are their nest eggs at age 65? 8 4 5 Interest rate: 0.08 6 Sue Joe 7 Age Contribution Interest Balance Age Contribution Interest Balance 8 20 5000 $ 200 $ 5.200 20 9 21 5000 $ 616 $ 10,816 21 10 22 5000 $ 1,065 $ 16,881 22 11 23 5000 $ 1551 $ 23.432 23 12 24 5000 $ 2,075$ 30,506 24 13 25 5000 $ 2,641 $ 38,147 25 14 26 5000 $ 3,252 $ 46,399 26 15 27 5000 $ 3,912 $ 55,310 27 16 28 5000 $ 4,625 $ 64.935 29 17 29 5000 $ 5,395 $ 75,330 29 18 30 5000 $ 6,226 $ 86,557 30 19 31 5000 $ 7,125 $ 98,681 31 20 32 5000 $ $ 8,094 $ 111,776 32 21 33 5000 $ 9,142 $ 125,918 33 22 34 5000 $ 10,273 $ 141,191 34 23 35 5000 $ 11,495 $ 157,686 35 24 36 5000 $ 12,815 $ 175,501 36 25 37 5000 $ 14,240 $ 194,741 37 26 38 5000 $ 15,779 $ 215,521 38 27 39 5000 $ 17.442 $ 237,962 39 28 40 5000 $ 19,237 $ 262,199 40 10000 $ 400 $ 10,400 29 41 5000 $ 21.176 $ 288,375 41 10000 $ 1232 $ 21.632 30 42 5000 $ 23,270 $ 316,645 42 10000 $ 2,131 $ 33,763 31 43 5000 $ 25,532 $ 347,177 43 10000 $ 3,101 $ 32 44 5000 $ 27,974 $ 380,151 44 10000 $ 4,149 61,013 33 45 5000 $ 30,612 $ 415,763 45 10000 $ 5,281 $ 76,294 34 46 5000 $ 33.461 $ 454 224 46 10000 $ 6,503 $ 92,797 35 47 5000 $ 36,538 $ 495,762 47 10000 $ 7,824 $ 110,621 36 48 5000 $ 39,861 $ 540,623 48 10000 $ 9,250 $ 129,871 37 49 5000 $ 43,450 $ 589,073 49 10000 $ 10,790 $ 150,660 38 50 5000 $ 47,326 $ 641,399 50 10000 $ 12,453 $ 173,113 39 51 5000 $ 51,512 $ 697,910 51 10000 $ 14,249 $ 197,362 40 52 5000 $ 56,033 $ 758,943 52 10000 $ 16,189 $ 223,551 41 53 5000 $ 60,915$ 824,859 53 10000 $ 18.284 $ 251835 42 54 5000 $ 66,189 $ 896,047 54 10000 $ 20,547 $ 282,382 43 55 5000 $ 71,884 $ 972,931 55 10000 $ 22,991 $ 315,373 44 56 5000 $ 78,034 $1,055,966 56 10000 $ 25,630 $ 351002 45 57 5000 $ 84,677 $ 1,145,643 57 10000 $ 28,480 $ 389,483 46 58 5000 $ 91,851 $ 1,242,494 58 10000 $ 31,559 $ 47 59 5000 $ 99,600 $ 1,347,094 59 10000 $ 34,883 $ 475,924 48 60 5000 $ 107,968 $ 1,460,061 60 10000 $ 38,474 $ 524,398 49 61 5000 $ 117,005 $1,582,066 61 10000 $ 42,352 $ 576,750 50 62 5000 $126,765 $ 1,713,832 62 10000 $46,540 $ 633,290 51 63 5000 $ 137,307 $ 1,856,138 63 10000 $ 51,063 $ 694,353 52 64 5000 $ 148,691 $ 2,009,829 64 10000 $ 55,948 55,948 $ 760,302 53 65 5000 $ 160.986 $ 2,175,816 65 10000 $ 61,224 $ 831526 54 55 Total Sav. $ 230,000.00 $ 260,000.00 $ 46,864 431,041