You expect to contribute to an investment fund for your retirement over the next 30 years with an annual deposit of a yet-to-be determined amount. Assume your goal is to have $2 million available when you stop the annual desposits and that the fund is able to return 10% per year every year. (a) Determine if you will reach your goal for either of the following two deposit scenarios: (1) $12,000 each and every year; (2) $8000 at the end of next year for 15 years, followed by $15,000 deposits in each of years 16 through 30. (b) Determine the exact number of years necessary to accumulate the $2 million if $12,000 is deposited each year until the goal is achieved. (c) For a little more of a challenge, use only the FV function to determine the number of years necessary to attain the $2 million goal for the second deposit scenario, assuming the $15,000 is deposited annually until the goal is achieved.
You expect to contribute to an investment fund
for your retirement over the next 30 years with
an annual deposit of a yet-to-be determined
amount. Assume your goal is to have $2 million
available when you stop the annual desposits
and that the fund is able to return 10% per year
every year.
(a) Determine if you will reach your goal for either
of the following two deposit scenarios: (1)
$12,000 each and every year; (2) $8000 at the
end of next year for 15 years, followed by
$15,000 deposits in each of years 16 through 30.
(b) Determine the exact number of years necessary
to accumulate the $2 million if $12,000
is deposited each year until the goal is
achieved.
(c) For a little more of a challenge, use only the
FV function to determine the number of
years necessary to attain the $2 million goal
for the second deposit scenario, assuming the
$15,000 is deposited annually until the goal
is achieved.
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