Lindsay is 27 years old and has a new job in web development.She wants to make sure that she is financially sound by the age of55, so she plans to invest the same amount into a retirementaccount at the end of every year for the next 28 years.
| (a) | Construct a data table in Excel that will show Lindsay thebalance of her retirement account for various levels of annualinvestment and return. If Lindsay invests $10,000 at return of 6%,what would be the balance at the end of the 28th year?Note that because Lindsay invests at the end of the year, there isno interest earned on the contribution for the year in which shecontributes. Round your answer to a whole dollar amount. |
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| (b) | Develop a two-way table for annual investment amounts of $5,000to $20,000 in increments of $1,000 and for returns of 0% to 12% inincrements of 1%. From the 2-way table, what are the minimum annualinvestments Lindsay’s must contribute for annual rates ranging from6% to 11%, if she wants to accrue a final payout of at least $1million? Note that because Lindsay invests at the end of the year,there is no interest earned on the contribution for the year inwhich she contributes. |
| | Annual Return | Minimum Annual Investment | | 6% | $ | | 7% | $ | | 8% | $ | | 9% | $ | | 10% | $ | | 11% | $ |
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