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At each question the solution cell must contain the Excel formula (Function) that produced the answer. - Replace the existing numerical contents.- Also add a brief explanation of how the answer was derived and the significance of the question in understanding the Time Value of Money.
1. Alan had saved up $500,000. How much more must he save each year over the next 20 years in order to have atotal of $1 million? Alan earns 5% interest, compounded annually.
Hint: Use the Excel PMT function.
2. You deposit $5,000 in an account that pays 8% interest per annum. How long will it take to double your money?
Hint: Use the Excel NPER function.
Use the Rule of 72.
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