Question
I need help redesigning the spreadsheet model to incorporate the random variability of the annual salary growth rate and the annual portfolio growth rate into
| I need help redesigning the spreadsheet model to incorporate the random variability of the annual salary growth rate and the annual portfolio growth rate into a simulation model in excel. I need to show how to simulate for the 10 years of data below. The results of the model must show me the uncertainty associated with reaching my $400,000 dollar goal in 10 years. |
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| Age | 20 |
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| Current Salary | $10,000 |
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| Current Portfolio | $5,000 |
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| Annual Investment Rate | 41% |
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| Salary Growth Rate | 35% |
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| Portfolio Growth Rate | 10% |
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| Year | Beginning Balance | Salary | New Investment | Earnings | Ending Balance | Age |
| 1 | $5,000 | $10,000 | $ 4,093 | $ 1,932 | $ 11,025 | 21 |
| 2 | $11,025 | $13,500 | $ 5,525 | $ 3,036 | $ 19,586 | 22 |
| 3 | $19,586 | $18,225 | $ 7,459 | $ 4,569 | $ 31,614 | 23 |
| 4 | $31,614 | $24,604 | $ 10,069 | $ 6,686 | $ 48,369 | 24 |
| 5 | $48,369 | $33,215 | $ 13,594 | $ 9,594.62 | $ 71,557 | 25 |
| 6 | $71,557 | $44,840 | $ 18,351 | $ 13,578.64 | $ 103,487 | 26 |
| 7 | $103,487 | $60,534 | $ 24,774 | $ 19,019.66 | $ 147,281 | 27 |
| 8 | $147,281 | $81,722 | $ 33,445 | $ 26,433.87 | $ 207,160 | 28 |
| 9 | $207,160 | $110,324 | $ 45,151 | $ 36,518.80 | $ 288,830 | 29 |
| 10 | $288,830 | $148,937 | $ 60,954 | $ 50,216.76 | $ 400,000 | 30 |
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Financial Management
Authors: I.M. Pandey
12th Edition
939057725X, 978-9390577255
