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An employee starts working at the age of 2 2 at an annual salary of $ 5 0 , 0 0 0 . She hopes
An employee starts working at the age of at an annual salary of $ She hopes to get an average increase of each year. Each year, her retirement plan requires her to contribute of her annual salary and the employer will contribute of her contribution, ie the employee contributes $ to the retirement fund in year and the employer contributes $ making the balance a $ The current balance in the retirement fund earns an annual return of which is applied into next year. This means the year balance is the year balance plus return on the year balance plus the year employee and employer contributions.
Develop an Excel model for retirement planning. Extend this model up to years of age
Type your answers to parts a b and c from your solution in the space provided below. Be brief and to the point.
Part a: How old will she be when the retirement balance grows to $ million? What is the retirement balance at the age of
Part b: Suppose the yearly salary increase is not fixed at but randomly varies between to based on a uniform distribution. Which Excel function will you use to generate this yearly increase? In this scenario, how old she will be when the retirement balance grows to $ million?
Part c: Keep the salary increase as uniformly random as in part b Now consider the scenario where the return on investment is not fixed at but randomly follows a normal distribution with a mean of and standard deviation of Which Excel function will you use to generate this return on investment? In this scenario, how old she will be when the retirement balance grows to $ million?
Must use Excel Formulas and Provide lots of screenshots on how to set it up and the formula in each.
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