Use Excel

The starting salary for your career is $54,472.

a) Assume you are 22 years old now. Project earnings every year from 22 through 67 assuming a 3% growth rate in salary.

b) Assume you will save 8% of your gross salary every year. Calculate your retirement savings each year.

c) If you earn 7% on your savings each year (about what you would have earned historically if you had half your savings in stocks and half in bonds), how much will you have when you are 67?

d) Now assume that while you start working at 22 (and your salary grows as described above), you wait until you are 40 to start your savings program. How much will you have at 67? Use the second set of columns to do this part of the problem, including a separate set of input boxes.

0 3 Starting salary 54,472 Starting salary Growth rate of $54,472 Starting salary Growth rate of $54,472 Growth rate of Percent of salary Percent of salary Return on Return on savings Return on savings addition to interest on total addition to interest on total addition to interest on total alary savings savings savings alary savings savings savings alary savings savings savings $4,358 $305 $9,151