Question

Using Excel please explain and show steps. Thanks

You graduate from Hardvard and start your first job at age 25. Since you are a financially savvy person now, you decide to start planning for retirement right away. Your Aunt Betty died and left you $70K of which you decide to save $40K for your retirement plus an annual sum you will put away each year for 40 years at 7% interest. 1) To determine how much to save, you decide to work backwards. You could potentially live to 100 years old, so you need to plan on 35 years in retirement, assuming you retire at 65. Suppose you also decide you want $120K of income and you expect Social Security to cover $30K, leaving a net gap of $90K. While in retirement, you will use a low-risk investment vehicle that returns 3.5% How much money do you need at age 65 to fund your "gap" for 35 years using these assumptions? Show your work on the left. 2) Now that you know your target for age 65, calculate how much you will need to put away at 7% interest to meet this need. Be sure to factor in the starting value of $40K from Aunt Betty. Show your work on the left.