Word Document Of 7,001,000 Words With Attached Excel 406491
Word Document Of 7001000 Words With Attached Excel Spreadsheet Showi
Word document of 700–1,000 words with attached Excel Spreadsheet showing calculations Your next assignment as a financial management intern is to apply the knowledge that you acquired while engaging in the time value of money discussion that you had with your colleagues. In this task, you will be building the foundation for a retirement plan using the concepts presented in this phase.
First, you will need to estimate the future cost of 3 lifestyles assuming an inflation rate of 3% and the number of years before you turn 67 years old.
Next, you will need to estimate the 5-year average rate of return of the stock market (you should use the top 500 stocks, which can be researched at finance Web sites).
If an individual needed the following amounts to retire, how much would he or she have to invest today at the rate of return that you calculated in the previous step, assuming he or she will turn 67 in the same year you do?
Now, you will need to estimate the life expectancy of the retiree.
Now, you can subtract the life expectancy of the retiree from 67 (the retirement age) and use the first of the 2 tables below to calculate the required amount at retirement to support the following lifestyles adjusted for inflation.
Now, using the second table, you can calculate the annual contribution that needs to be made to have each required amount at retirement.
After completing the required calculations, explain your results in a Word Document and attach the spreadsheet showing your work. Be sure to explain the following:
- The difference between present and future values
- How the present value and future value calculations are calculated and related
- The difference between compounding and discounting
- Yahoo! Finance. (2014). S&P 500 index chart. Retrieved from https://finance.yahoo.com