Description
Greetings, I have 3 questions in excel to be completed. The questions will be in the attachment below, thanks.
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Explanation & Answer
Hey there, please see the attached Excel. The explanations for each question are included in the Excel file as well. Let me know if you have any questions. The formulas used for these types of questions can sometimes be a bit different so let me know if you have questions about the way I did things :)
1)
Contribution (PV):
$
interest rate (r):
7,55%
Years (n):
30
FV = PV (1+r)^n
$
Yearly contribution (C):
$
interest rate (r):
44.389,72 = value of your account after 30
1.000
8,50%
Years (n):
FV of annuity = C ((1+r)^n-1)/r)
5.000
30
$ 124.214,73 = value of your account after 30
Explanation: Under the first scenario, the future value must be calculated on the presen
interest on it would be $44,390 after the 30 years. Under the second scenario, the futu
be $124,214.73. The second scenario yield a much higher account value which makes se
result in a higher account balance.
2)
unfunded pension liability (FV):
$645 mil
Years...