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Question 2. Upon starting your new job after college, you've been confronted with selecting the investments...

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Finance

Question 2. Upon starting your new job after college, you'vebeen confronted with selecting the investments for your 401(k)retirement plan. You have four choices for investing yourmoney:

  • a money market fund that has historically returned about 0.50%per year.
  • A long-term bond fund that has earned an average annual returnof 4.0%
  • A conservative common-stock fund that has earned 6.0% peryear.
  • An aggressive common-stock fund that has earned 9.0% peryear.

a. If you were to contribute $5,500 per year for the next 35years, how much would you accumulate in each of the abovefunds?

b. Now, change your worksheet so that it allows for less thanannual investments (monthly, weekly, etc.). The annual investmentwill be the same, but it will be made in smaller, more frequent,amounts.

c. Set up a scenario analysis that shows your accumulated valuein each fund if you were to invest quarterly, monthly, biweekly,and weekly. Create a scenario summary table of your results.

d. What relationship do you notice between the frequency ofinvestment and future value? Create a column chart of the resultsthat more clearly shows the outcome from more frequentlyinvesting.

I need to know the excel formula step by step to get this done.I have A but need B C and D

Answer & Explanation Solved by verified expert
3.9 Ratings (606 Votes)
a Just added this part for completion for the benefit ofothers tooMoney MarketFundLongTerm BondConservative CommonStockAggressive CommonStockAnnual Return050400600900Contribution per year550000 550000550000 550000No of periods in years35353535No of instalments per year1111Total no of instalments Row 4 x Row 535353535Accumulated at the end 2979958 40508724 61289129 118640915Formula for the aboveFVB2B6B3FVC2C6C3FVD2D6D3FVE2E6E3b I hope this is what you need other than this seescreenshots at the end of the answer to see answer to this    See Answer
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