Question
Please help me to solve this in excel. Upon starting your new job after college, youve been confronted with selecting the investments for your 401k
Please help me to solve this in excel.
Upon starting your new job after college, youve been confronted with selecting the investments for your 401k retirement plan.
You have four choices for investing your money:
A money market fund which has historically returned about 5% per year.
A long-term bond fund which has earned an average annual rate of return of 8%.
A conservative common-stock fund which has earned 10% per year.
An aggressive common-stock fund which has historically earned 14%
per year.
a. If you were to contribute $3,600 per year for the next 35 years, how much would you accumulate in each of the above
funds?
b. Now, change your worksheet so that it allows for non-annual investments (monthly, bi-weekly, etc.). Set up a scenario analysis that shows your accumulated value in each fund if
you were to invest quarterly, monthly, bi-weekly, and weekly. Create a scenario summary of your results.
c. What relationship do you notice between the frequency of investment and the future value?
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