TVM with Excel Assignment: There are two major goals for this assignment: (1) to demonstrate your understanding and the correct application of Time Value of Money concepts in a financial problem-solving situation, and (2) to demonstrate your ability to use the TVM functions of Excel. When Yvonne was twelve, her grandfather gave her $5,000 to be used for college. Yvonne was a good student and dreamed of going to a good school, so she invested the gift in a 10-year bank CD earning 71?4%. She received a generous scholarship and never needed to use the money from her grandfather. After graduating from college at age 22, she began working at a great job. Knowing the value of early investing, she began saving for retirement right away. When the CD matured she put it into an investment account earning 51?2% and made an additional annual investment of $1,000 every January 1st. She also opened a retirement account and put $4,000 into it every year on January 1st and over the years it earned a steady 53?4%. Now Yvonne is 45 and thinking shed like to retire early at age 55. At age 65 shell get an extremelygenerous corporate pension, which along with Social Security payments will allow her to live very well indeed. She believes that with clever investing strategies both of her accounts will be able to earn 61?2%. She plans to continue making the same annual contributions to her accounts until retirement. What Yvonne wants to know is whether her retirement savings will be able to provide enough income each year to allow her to live comfortably until age 65 when the pension kicks in.

How much will she be able to withdraw each January 1st if she takes early retirement?