Question
Retirement Fund Parameters Current Year 2016 Age 37 Current Savings $259,000 Rate of Return on Retirement Savings 7.0% Current Annual Salary $145,000 Expected Annual Salary
Retirement Fund
Parameters | |
Current Year | 2016 |
Age | 37 |
Current Savings | $259,000 |
Rate of Return on Retirement Savings | 7.0% |
Current Annual Salary | $145,000 |
Expected Annual Salary Increase | 2.0% |
% of Salary Contributed | 6.0% |
Expected Age of Retirement | 65 |
% Employer Contribution | 5.0% |
Annual Employee (tax free) Contributions | $6,000 |
Inflation Rate | 2.00% |
2a) Prepare a spreadsheet indicating the value of retirement fund on a yearly basis when retiring at age of 65.
2b) what is the net present value of the retirement fund at retirement age assuming an inflation rate of 2.0%?
I need help figuring out how to prepare a table in excel for this. I completed one already but it was not what the professor was looking for. He showed the class how to do it but was going to fast in his lecture. I was only able to copy down what I could. This is what he told us to start with..
Current Year | Age | Beginning savings | Current Salary | salary contributed | Employer contribution | Fixed contribution | Ending savings | |||
2016 | 37 | 259000 | 145000 | 8700 | 7250 | 6000 | 300617 |
The final answer for part one is $4,225,518. In my origional excel, I basically added contributions per year along with the rate of return on retirement savings from the final amount in the retirement fund. My question is, what calculations in excel should I use to get to my answer and how do I get to the final $4,225,518? Is there any way someone could show me the formulas in excel?
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