Question
(For this part, you MUST present sufficient solution steps, and MUST apply specific Excel functions =PV(), =FV(), =PMT(), =NPER(), =RATE(), =PRICE() or =YIELD() whenever applicable.
(For this part, you MUST present sufficient solution steps, and MUST apply specific Excel functions =PV(), =FV(), =PMT(), =NPER(), =RATE(), =PRICE() or =YIELD() whenever applicable. Please show me the EXCEL functions that was used to help me better understand was equals what. Using Excel finance formulas
By the end of each year, you contribute an equal amount of $3,500 per year to your retirement fund portfolio, which earns an annual nominal return of 11.57% averagely in the long term. The annual contribution continues for 36 years until you retire. (Note: All tax concerns are ignored.)
(a) Ignoring the annual inflation. By the time of your retirement, how much nominal money value would you have in your portfolio?
(b) Again, ignoring the annual inflation. For your post-retirement life (which would last another 28 years), by the end of every year you withdraw and spend an equal amount of annuity payment from your retirement fund account. What should be the nominal annual payment amount you withdraw if you do not plan to leave any money to your heirs?
(c) This time, considering the long-term annual inflation averages 3.15%. By your retirement, how much real money (at deflated real purchasing power) will you actually have in the account? How much equal amount (also at deflated real purchasing power) should you withdraw and spend by the end of each year for your retirement life, provided that you do not plan to leave any money to your heirs?
(d) Again, consider the long-term annual inflation 3.15%. By your retirement, how much real money (at deflated real purchasing power) will you actually have in the account? How much equal amount should you and your heirs withdraw and spend (at deflated real purchasing power) by the end of each year, provided that you plan to allow both you and your heirs to benefit from this fund, generations after generations infinitely?
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