How to Become a Millionaire! In this assignment, you are going to practice using the spreadsheet by using it to project compounded accumulated savings. This assignment shows very clearly how a relatively low level of savings early on can produce a relatively large amount of wealth if invested in a place where you can get a good rate of return (7.0%) over a long period of time. 1) Assume that you are 21 and that you will retire in 50 years at age 70. Assume two different saving scenarios. You will put the money in a stock market index fund where we assume you will get a fixed rate of return of 7% per year. In the first scenario you save $1200 per year ($100 per month) for ten years, from age 21 to age 30, and nothing after that. In the second, you don't save anything during the first ten years, and then, for the next forty years from age 31 to 70, you save $1200 per year. In the first scenario you will save a total of $12,000 in all. In the second scenario you save a total of $48,000. At the end of the 50 years, which scenario will give you the highest balance? Use Excel to calculate your balance each year and the total after the 50 years. What is your conclusion? Are you surprised? 2) In a third scenario, assume that you decide to save $1000 per year from age 21 to age 70, for a period of 50 years. Assume also that you will get a constant interest rate on your savings over the period at the rate of 7% per year. Use Excel to calculate and show your accumulated savings for each of the fifty years. What will be your total accumulated savings, including interest, at the end of the 50 years? I 3) How much would you have to save each year at 7% interest in order to have $1,000,000 after 50 years? In other words, how much do you need to save in order to become a millionaire? 4) So, what is the secret to becoming a millionaire? Set the Excel program up in such a way that you can change the interest rates, and instantaneously calculate the compounded values. Describe briefly how you set up Excel to solve for these compounded values