Reference no: EM132287512

Compound Interest Calculator 1: You are making plans to save for your retirement in 30 years. You found a good mutual fund that yields 8% annual return on average. You’d like to know how much money you can expect to have in 30 years if you invest $500 every month. Assume interests are compounded monthly. Draw an influence chart and build an Excel spreadsheet. You may use the Excel function FV (future value). 2. Continuing from question 1, suppose you can try to reduce your day-to-day spending and increase your monthly investment to $600, $700, $800, $900, or $1000. Furthermore, you noticed that the mutual fund could yield as high as 10% annual return over the next 30 years if you are lucky. Use a 2-way data table to examine the final value of your account in 30 years for all of these investment amounts and interest rates. What is the highest possible amount you are able to accumulate in 30 years? Under what conditions?

Function: FV Syntax =FV(rate, nper, pmt, pv) rate Interest rate per payment/compound cycle nper Number of payments pmt Amount of payments each cycle. Use negative values for savings/investments (e.g. enter “-100” for saving/investing $100) pv Present value, or initial investment. Use negative values for savings/investments (e.g. enter “-100” if you have $100 in savings to start)

Hint: Monthly interest rate is 1/12th of the annual interest rate. For example, an annual interest rate of 8% would be equivalent to a monthly interest rate of 0.667%.