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Upon starting your new job after college, you've been confronted with selecting the investments for your 401(k) retirement plan. You have four choices for investing
Upon starting your new job after college, you've been confronted with selecting the investments for your 401(k) retirement plan. You have four choices for investing your money: A money market fund that has historically returned about 1% per year. A long-term bond fund that has earned an average annual return of 4.5%. A conservative common-stock fund that has earned 6.5% per year. An aggressive common-stock fund that has earned 9% per year. The attached Excel sheet will get you started. Please do the following: 1. If you contribute $5,500 per year (at the end of each year) for the next 35 years, how much would you accumulate in each of the above funds? Indicate and calculate the amount in your Excel sheet. 2. Change your worksheet so it allows for less than annual investments (including monthly, biweekly, quarterly, semiannually, weekly and daily). The annual investment will be the same, but it will be made in smaller, more frequent, amounts. Create a table that shows the future value of each investment option with the more frequent compounding periods. 3. What is the relationship between the frequency of investment and the future value? Create a column chart of the results that more clearly shows the outcome from more frequently investing
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