Question: you are considering a savings plan that calls for a...
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You are considering a savings plan that calls for a deposit of $12,000 at the BEGINNING of each of the next five years. If the plan offers an interest rate of 8 percent, how much will you accumulate at the end of year 5?
Do this calculation by completing the following template using Excel. Your spreadsheet will do the FV calculation twice - once using the FV function (in Cell B4) and once using a simple table that shows the accumulation at the beginning of each year that would be similar to what you would show a client that does not understand future value accumulation very well. Please show all work in excel and functions being used (I am used to a financial calculator). Thanks!
| A | B | C | D | |
| 1 | Annual payment | 12,000 | ||
| 2 | Interest rate | 8% | ||
| 3 | Number of years | 5 | ||
| 4 | Total value | <--Use FV function | ||
| 5 | ||||
| 6 | Year | Accumulation at beginning of year | Payment at end of year | Annual interest |
| 7 | 1 | 0 | 12,000 | 0 |
| 8 | 2 | 12,000 | 12,000 | |
| 9 | 3 | |||
| 10 | 4 | |||
| 11 | 5 | |||
| 12 | 6 | |||
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