Suppose that you begin planning your investments on your40th birthday (the sooner you start, the better!),retire at the age of 65, and expect some amount of growth in yoursalary year to year. Further suppose that you intend to invest someconsistent proportion of your income each year and wish tounderstand the final value of your retirement account based on whatproportion of your income you invest each year. Finally, to makethe math easier, let’s assume that you deposit each year’sinvestment all at once at the beginning of the year. NOTE: Likethe demonstration video from this Module, you can tweak and reusethis template for your own personal planning
Part 1
Suppose you’ve set a goal of having a million dollars in yourretirement portfolio by the age of 60; begin by developing awhat-if model using the template provided to represent the problemabove i.e. to assess what balance you can expect at the age of 60.To make the math easy, assume for the moment that both your salarygrowth and your portfolio’s return on investment will be consistenteach year. To validate your model, enter an Annual Investment Rateof 7.5%; if you have built the model correctly, you should find aTotal Profit of $907,782. Once you’ve confirmed that your what-ifmodel is correct, use Goal Seek to determine the minimum AnnualInvestment Rate necessary to have a balance of at least $1,000,000when you turn 60.
- Problem Statement Suppose That You Begin Planning Your Investments On Your 40th Birthday The Sooner You Start The Bett 1 (82.19 KiB) Viewed 71 times