Please use the excel function data on stocks, bonds, bills to start discussion on time value.

First question:

Using the data and $100 invested in stocks, bonds and bills, confirm the values at 2011.

Terminal value at 2011= $100(1+r1)(1+r2)...(1+r84)

where r1= actual return given for 1928

r2=actual return given for 1929

r84=actual return given for 2011 for stocks, bonds and bills

Second Question:

Investing over 84 years is a little far fetched unless your grandfather was like Donald Trump's G.PA. Now consider dividing 1928-2011 to three sub-period of 1928-56 (28 years), 1956-1984 28 yr) and 1984-2011 (27 yr). Let's see how investment of $100 in stocks, bonds, bills using again the actual returns provided in each asset class (stocks, bonds, bills) perform? Compare, the future value of each investment as if in the second 28 years, and last 27 years you start with $100 investment in stocks, bonds, bills. What are the lessons we learn in this exercise as far as your future contribution to your own 401K is concerned?

									1929-69	1970-1999	2000-2010			43.81%	0.3458	7.2317E-08
1		-0.086159205		0.060599779		0.010796691			-0.086159205	0.033565385	0.010796691			-8.30%	-0.1753	-9.42131E-09
2		-0.064798206		0.043716203		0.018134509			-0.064798206	0.053135276	0.018134509			-25.12%	-0.3435	-7.08836E-08
3		-0.130664109		0.057865169		0.025409119			-0.130664109	0.057926698	0.025409119			-43.84%	-0.5307	-2.61404E-07
4		-0.012961942		0.064200153		0.034681153			-0.012961942	-0.005516203	0.034681153			-8.64%	-0.1787	-9.9802E-09
5		0.108829282		0.065178819		0.030709812			0.108829282	-0.002108193	0.030709812			49.98%	0.4075	1.18345E-07
6		0.088824493		0.025272637		0.026578468			0.088824493	0.053636625	0.026578468			-1.19%	-0.1042	-1.97865E-09
7		0.130525341		0.048410845		0.019130301			0.130525341	0.045981039	0.019130301			46.74%	0.3751	9.23011E-08
8		0.051279427		0.031066128		-0.003369578			0.051279427	0.055777856	-0.003369578			31.94%	0.2271	2.04841E-08
9		-0.034368611		0.001902212		-0.030694657			-0.034368611	0.031254407	-0.030694657			-35.34%	-0.4457	-1.54844E-07
10		0.08076225		0.033565385		0.023914594			0.08076225	-0.00275209	0.023914594			29.28%	0.2005	1.40964E-08
11		0.087694748		0.053135276		0.018073949			0.087694748	0.02538567	0.018073949			-1.10%	-0.1033	-1.92782E-09
12		0.170769363		0.057926698		0.173364361	0.015760396		0.170769363	-0.019424617	0.173364361	0.015760396		-10.67%	-0.199	-1.37824E-08
13		0.184468864		-0.005516203					0.184468864	0.045176358				-12.77%	-0.22	-1.86223E-08
14		0.163718456		-0.002108193					0.163718456	0.071865468				19.17%	0.0994	1.71761E-09
15		0.080786606		0.053636625					0.080786606	0.041375637				25.06%	0.1583	6.93759E-09
16		-0.011212196		0.045981039					-0.011212196	0.034646521				19.03%	0.098	1.64605E-09
17		-0.109414632		0.055777856					-0.109414632	0.031989266				35.82%	0.2659	3.28792E-08
18		-0.008990897		0.031254407					-0.008990897	0.041111263				-8.43%	-0.1766	-9.63247E-09
19		0.044009918		-0.00275209					0.044009918	0.03572837				5.20%	-0.0403	-1.14467E-10
20		-0.005181627		0.02538567					-0.005181627	0.018770941				5.70%	-0.0353	-7.6929E-11
21		0.087407086		-0.019424617					0.087407086	-0.002342066				18.30%	0.0907	1.30493E-09
22		0.077387486		0.045176358					0.077387486	0.0339273				30.81%	0.2158	1.7576E-08
23		0.038299449		0.071865468					0.038299449	0.02852657				23.68%	0.1445	5.27678E-09
24		0.04603033		0.041375637					0.04603033	0.04073413				18.15%	0.0892	1.24125E-09
25		-0.006310762		0.034646521					-0.006310762	0.025149214				-1.21%	-0.1044	-1.99006E-09
26		0.072004806		0.031989266					0.072004806	0.037398195				52.56%	0.4333	1.42276E-07
27		0.019774237		0.041111263					0.019774237	0.044569161				32.60%	0.2337	2.23225E-08
28		0.020097347		0.03572837					0.020097347	0.043551123				7.44%	-0.0179	-1.00306E-11
29		-0.009004156		0.018770941					-0.009004156	0.048273916				-10.46%	-0.1969	-1.33507E-08
30		0.071717015		-0.002342066					0.071717015	0.041380783				43.72%	0.3449	7.17539E-08
31		0.024781711		0.0339273					0.024781711	0.988694005	0.032956467			12.06%	0.0283	3.96392E-11
32		1.170101873	0.036565684	0.02852657					0.023298568					0.34%	-0.0889	-1.22877E-09
33				0.04073413					0.060599779					26.64%	0.1741	9.22916E-09
34				0.025149214					0.043716203					-8.81%	-0.1804	-1.02678E-08
35				0.037398195					0.057865169					22.61%	0.1338	4.18923E-09
36				0.044569161					0.064200153					16.42%	0.0719	6.50058E-10
37				0.043551123					0.065178819					12.40%	0.0317	5.57113E-11
38				0.048273916					0.025272637					-9.97%	-0.192	-1.23785E-08
39				0.041380783					0.048410845					23.80%	0.1457	5.40934E-09
40				0.010796691					0.031066128					10.81%	0.0158	6.89822E-12
41				1.39770264	0.035838529				0.001902212					-8.24%	-0.1747	-9.32491E-09
42									1.591612386	0.038819814				3.56%	-0.0567	-3.18797E-10
43														14.22%	0.0499	2.17304E-10
44														18.76%	0.0953	1.51372E-09
45														-14.31%	-0.2354	-2.28131E-08
46														-25.90%	-0.3513	-7.58229E-08
47														37.00%	0.2777	3.74536E-08
48														23.83%	0.146	5.44282E-09
49														-6.98%	-0.1621	-7.44929E-09
50														6.51%	-0.0272	-3.51943E-11
51														18.52%	0.0929	1.40221E-09
52														31.74%	0.2251	1.99477E-08
53														-4.70%	-0.1393	-4.72736E-09
54														20.42%	0.1119	2.45051E-09
55														22.34%	0.1311	3.9407E-09
56														6.15%	-0.0308	-5.10996E-11
57														31.24%	0.2201	1.86477E-08
58														18.49%	0.0926	1.38867E-09
59														5.81%	-0.0342	-6.99591E-11
60														16.54%	0.0731	6.83153E-10
61														31.48%	0.2225	1.92644E-08
62														-3.06%	-0.1229	-3.24654E-09
63														30.23%	0.21	1.61966E-08
64														7.49%	-0.0174	-9.21326E-12
65														9.97%	0.0074	7.08697E-13
66														1.33%	-0.079	-8.62277E-10
67														37.20%	0.2797	3.82686E-08
68														23.82%	0.1459	5.43165E-09
69														31.86%	0.2263	2.02684E-08
70														28.34%	0.1911	1.22053E-08
71														20.89%	0.1166	2.77244E-09
72														-9.03%	-0.1826	-1.0648E-08
73														-11.85%	-0.2108	-1.63824E-08
74														-21.97%	-0.312	-5.31165E-08
75														28.36%	0.1913	1.22436E-08
76														10.74%	0.0151	6.02139E-12
77														4.83%	-0.044	-1.48979E-10
78														15.61%	0.0638	4.5418E-10
79														5.48%	-0.0375	-9.22273E-11
80														-36.55%	-0.4578	-1.678E-07
81														25.94%	0.1671	8.16009E-09
82														14.82%	0.0559	3.05493E-10
0.033581351														2.07%	-0.0716	-6.41955E-10
																-9.47347E-08