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Professor Brain is going to work for the next 25 years and then retire. At the end of the 25th year he would like to
Professor Brain is going to work for the next 25 years and then retire. At the end of the 25th year he would like to withdraw $80,000 per year from an investment account until the end of the 50th year (26 withdrawals). At the end of the 51st year he would like to have $100,000 to leave to his heirs. He currently has $60,000 to start the investment account. The investment account pays 8% with monthly compounding. Brain would like to know how much he should invest in the account each month with the first payment to be made in 1 month and continuing until he retires at the end of the 25th year. Please help Professor Brain determine what his monthly payment needs to be. 2. Create an Excel spreadsheet that will solve this problem. Identify the inputs so that they can be changed. In your first attempt | suggest mapping out all the cash flows so that you can get the timing correct and work this out by hand before attempting it in excel 3. In a second tab try to make the spreadsheet flexible enough so that the timing of the cash flows can change (I.e. Professor Brain could retire in 20 years after making only 20 years of deposits and still make his first withdrawal at the end of the 25th year.) 4. In a third tab assume Professor Brain's University will contribute 50 cents to his retirement account for every dollar that Professor Brain contributes. What does his monthly contribution need to be now? Professor Brain is going to work for the next 25 years and then retire. At the end of the 25th year he would like to withdraw $80,000 per year from an investment account until the end of the 50th year (26 withdrawals). At the end of the 51st year he would like to have $100,000 to leave to his heirs. He currently has $60,000 to start the investment account. The investment account pays 8% with monthly compounding. Brain would like to know how much he should invest in the account each month with the first payment to be made in 1 month and continuing until he retires at the end of the 25th year. Please help Professor Brain determine what his monthly payment needs to be. 2. Create an Excel spreadsheet that will solve this problem. Identify the inputs so that they can be changed. In your first attempt | suggest mapping out all the cash flows so that you can get the timing correct and work this out by hand before attempting it in excel 3. In a second tab try to make the spreadsheet flexible enough so that the timing of the cash flows can change (I.e. Professor Brain could retire in 20 years after making only 20 years of deposits and still make his first withdrawal at the end of the 25th year.) 4. In a third tab assume Professor Brain's University will contribute 50 cents to his retirement account for every dollar that Professor Brain contributes. What does his monthly contribution need to be now
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