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These cells are defined in rows 12 17 22 and 27 of

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Unformatted text preview: advisor has told Patrick that he can retire comfortably if he can accumulate \$300,000 by year 10 to supplement his other sources of retirement income. Use a 1000- trial RSPE simulation to estimate each of the following. The uncertain elements in this problem are the annual return of each investment over the next 10 years (Year 0 through Year 9). To simulate this, we define an uncertain variable cell for the annual return of each investment in each year. These cells are defined in rows 12, 17, 22, and 27 of the spreadsheet below. To track the investments, we calculate their balances in each year. Row 10, 15, 20, and 25 show the investment made by Patrick in each year. Rows 11, 16, 21, and 26 calculate the balance in each fund at the start of the year. For Year 0 in each fund, this will simply be the initial investment (\$25,000) plus the annual investment (\$2,500). For each future year, it will be the balance at the end of the preceding year plus the annual investment. For example, for Year 1 of the money market fund, the starting balance is D11 = C13 + D10. 1 Rows 13, 18, 23, and 28 calculate the year- end balance for each fund. This will be the starting balance times the net return. For example, for the money market fund in Year 0 this will be C13 = C11*(1+C12). Finally, the Year 10 totals are added up in M30 to calculate Patrick’s final nest egg. This cell is defined as a results cell in RSPE. Two statistic cells are defined in M31 and M32 to estimate the mean and standard d...
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