Question
Create an Excel sheet to compute your retirement year for a given saving rate: Assume you earn 10K each year and consume 1-s of your
Create an Excel sheet to compute your retirement year for a given saving rate: Assume you earn 10K each year and consume 1-s of your earnings. Say your saving rate is s and your consumption rate 1-s. How much capital you have in your saving account at the end of the first, second, and so on years? What's the minimum amount of capital you need at the beginning of period T such that you can withdraw your consumption rate, invest what remains, and end up with the same capital at the end of the year? Solve for the relationship between s and T. If s=50%, do you obtain the same T as above?
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