Question

Determine the amount of money in a savings account at the end of 3 years

Assume that you contribute $330 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $530 per month for the next 25 years. Given an 8 percent interest rate. What is the value of your retirement plan after the 40 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) 330 Initial monthly contribution Number of years Subsequent monthly contribution Number of years Interest rate earned 530 25 8.00% Complete the following analysis. Do not hard code values in yo Value at end of first set of contributions Value at end of second set of contributions Prev 4 of 10 onn

Answer 1

Using Excel

initial monthly contribution	330
Number of yrs	15
Subsequent monthly contribution	530
Number of yrs	25
Interest rate	8%
Value at end of first set	1,14,192.61
Value at end of second set	13,42,237.86

Value in account after three yrs = 330 * (F/A, 8% / 12,3*12)

= 330 * (F/A, 0.6667%,36)

= 330 * ((1 + 0.006667)^36-1)/0.006667

= 330 * ((1.006667)^36-1)/0.006667

= 13376.81

Pls comment if you think final solution is wrong or you require further explanation

Showing formula in excel

initial monthly contribution	330
Number of yrs	15
Subsequent monthly contribution	530
Number of yrs	25
Interest rate	0.08
Value at end of first set	=FV(G128/12,G125*12,-G124)
Value at end of second set	=FV(G128/12,G127*12,-G126,-G130)