For the spreadsheet, the following information is to be placed into the cells shown: Current salary A4 Money desired per year if retirement took place now A5 Rate of salary growth as a decimal (i.e. .025 for 2.5%/yr) A6 Rate of inflation per year as a decimal A7 Rate of investment growth as a decimal during first 15 yrs A8 Rate of investment growth as a decimal during yrs 16-45 A9 Rate of investment growth as a decimal during retirement A10 This assignment will assume that you will work for 45 years, and are retired for 25 years. The first retirement withdrawal will be at the end of year 46. Deposits will be made at the end of each year from years 1-45. The interest rate earned on the deposits changes after 15 years. Withdrawals need to increase at the rate of inflation. Part A. Determine the annual deposit required for years 1-45 if each deposit is the same. Complete the following table for years 1 through 70. Use time value of money equations to solve. No solver or goal seek is allowed. Yr Beg Balance Interest Deposit Withdrawal Salary % Salary End Balance Part Al. Repeat part A using solver to find the required deposit. Part B. Determine the annual deposit required for years 1 -45 if the amount deposited each year will increase at the same rate as the increase in salary. Complete a second table with the same columns as in part a. Use time value of money equations to solve. No solver or goa seek is allowed. Part B1. Repeat part B using solver to find the required deposit. Part C. Assume that the annual salary growth rate, the annual inflation rate, and the annual investment rate are all normally distributed random variables with a std dev equal to 20% of the mean. For these distributions, the means are the values given in the input cells. These variables will now change each year. Redo part A. Determine how much extra will be needed to deposit each year to be 90% sure you will meet your retirement objective. Complete a new table for this part. Part D. For part C assume the deposit could be adjusted each year and the withdrawals can be adjusted each year to make the balance come out to zero. Construct a sheet that does this as the simulation trials proceed. Create a forecast cell that keeps track of the total amount that will need to be deposited and another forecast cell for the total amount of money withdrawn for each cycle. The information in cells A4-A10 will be put into the spreadsheet only once for part A. If you use different sheets for parts B, C, and D, you will need to carry the data into those sheets. This assignment is to be done using Excel
