John Would Like to Establish a Retirement Plan That Returns

question 45

Essay

John would like to establish a retirement plan that returns an amount of $100,000 after a period of 20 years from now. Build a spreadsheet model to calculate the amount John must contribute at the end of each year towards his retirement fund, assuming an annual interest rate of 6%.
Use the Excel function
=PMT(rate, nper, pv, fv, type)
The arguments of this function are
rate = the interest rate for the loan
nper = the total number of payments
pv = present value (the amount borrowed which is 0 in this case)
fv = future value (in the formula, indicate this value as negative as the future value command assumes a stream of payments not deposits)
type = payment type (0 = end of period, 1 = beginning of the period)
Also, construct a one-way table with interest rate as the column variable and the amount contributed at the end of each year as the output. Vary the interest rate from 4% to 7% in increments of 0.5%.

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Definitions:

Sexual Exclusivity

Sexual partners who have sex only with each other.

Sexually Transmitted Infections

Illnesses that spread chiefly through sexual relations, which can be caused by a range of pathogens including bacteria, viruses, and parasites.

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The process of receiving a vaccine to stimulate the body's immune response against specific diseases.

Cervicitis

Inflammation of the cervix, often caused by infection, and can lead to discomfort or more serious reproductive issues if untreated.