Analysis of the amount saved for retirement

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Eve Brown is trying to save for her retirement, she believes she can earn 12% on average each year on her retirement fund. Assume that at the beginning of each of the next 40 years, Eve will allocate x dollars to her retirement fund. If at the beginning of a year Eve has y dollars in her fund, by the end of the year, it will grow to 1.12y dollars.

a.) Using Excel, develop a spreadsheet model to find out how much Eve should allocate to her retirement fund each year to ensure that she will have $1 million at the end of 40 years.

b.) Are there any key factors that are being ignored in our analysis of the amount saved for retirement.

Reference no: EM132640965

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