Think Like An Accountant 2

TITLE THINK LIKE AN ACCOUNTANT
Chapter 2
COLLEGE The College worksheet contains a schedule that calculates the annual return on investment for a college fund. For each year,
the annual contribution and the annual return on the investment is used to calculate a new ending value. The chart illustrates
how the annual return on investments accelerates over time.
STEPS 1 Read all of the steps before working with this workbook.
2 Click the Analysis worksheet tab to view the template.
3 Key your name in cell C2.
4 Enter the appropriate data in cells denoted by a question mark (?).
5 Use the schedule to answer question (1).
Modify the schedule to determine the amounts necessary to reach the stated goals:
6 Follow steps 7-14 to answer questions (2) and (3).
7 On the Data tab in the Data Tools group, select What-If Analysis and Goal Seek.
8 In the Goal Seek window, for the Set cell box, select the cell from the analysis containing the Ending Balance for Year 18.
9 For the Set cell box, select the cell from the analysis containing the Ending Balance for Year 18.
### For the To value box, enter the goal amount (do not include dollar signs or commas).
### For the By changing cell box, select the cell from the analysis containing the amount to be changed (the annual contribution).
### Click OK.
### Use the schedule to answer the questions.
RETIREMENT The Retirement worksheet resembles the College worksheet. The schedule calculates the annual return on investment for a
retirement fund for a single annual investment between a starting and ending age. The longer period of time in this worksheet
provides a more dynamic illustration of how investments grow over time.
STEPS 1 Enter the appropriate data in cells denoted by a question mark (?).
2 Use Goal Seek to determine the annual contribution necessary to answer each question.
3 Print the worksheet solution for each question, as instructed by your teacher.
4 Save your work and submit the saved Excel File on Edmodo.
Problem Number: Think Like an Accountant, Chapter 2
Student's Name: First Waritsara Theerakulwijan
Annual Contribution $ 4,024

Total Investment $ 100,000
Annual Rate of Return 6.0%
Beginning Annual Annual Return

Year Ending Balance
Balance Contribution on Investment
1 $ - $ 4,024 $ 241 $ 4,265 1 Yes, he will have 155,336 for the ending balance
2 4,265 4,024 256 8,544 2 $3219
3 8,544 4,024 513 13,081 3 $4024
4 13,081 4,024 785 17,889
5 17,889 4,024 1,073 22,986
6 22,986 4,024 1,379 28,388
7 28,388 4,024 1,703 34,115
8 34,115 4,024 2,047 40,186
9 40,186 4,024 2,411 46,620
10 46,620 4,024 2,797 53,441
11 53,441 4,024 3,206 60,671
12 60,671 4,024 3,640 68,335
13 68,335 4,024 4,100 76,459
14 76,459 4,024 4,588 85,070
15 85,070 4,024 5,104 94,197
16 94,197 4,024 5,652 103,873
17 103,873 4,024 6,232 114,129
18 114,129 4,024 6,848 125,000
Annual Additions to Fund
Annual Return on
Investment
Annual Contribution
Problem Number: Think Like an Accountant, Chapter 2
Student's Name: First Waritsara Theerakulwijan
Annual Contribution $ 20,074 4 $5716

Annual Rate of Return 6.0% 5 20074
Contributions Begin at Age 43 6 Reflective Q What advice would you give to a friend about saving for a pension?
Contributions End at Age 65 May be he should change the bank that offer more interest or save more money for each month
Total Contributions $ 1,000,000
Ending Balance by Age
Annual Annual Return

Age Beginning Balance Ending Balance
Contribution on Investment
18 $ - $ - $ - $ -
19 - - - -
20 - - - -
21 - - - -
22 - - - -
23 - - - -
24 - - - -
25 - - - -
26 - - - -
27 - - - -
28 - - - -
29 - - - -
30 - - - -
31 - - - -
32 - - - -
33 - - - -
34 - - - -
35 - - - -
36 - - - -
37 - - - -
38 - - - -
39 - - - -
40 - - - -
41 - - - -
42 - - - -
43 - 20,074 1,204 21,278
44 21,278 20,074 2,481 43,834
45 43,834 20,074 3,834 67,742
46 67,742 20,074 5,269 93,085
47 93,085 20,074 6,790 119,949
48 119,949 20,074 8,401 148,424
49 148,424 20,074 10,110 178,608
50 178,608 20,074 11,921 210,603
51 210,603 20,074 13,841 244,518
52 244,518 20,074 15,876 280,467
53 280,467 20,074 18,032 318,574
54 318,574 20,074 20,319 358,967
55 358,967 20,074 22,742 401,783
56 401,783 20,074 25,311 447,169
57 447,169 20,074 28,035 495,277
58 495,277 20,074 30,921 546,272
59 546,272 20,074 33,981 600,327
60 600,327 20,074 37,224 657,625
61 657,625 20,074 40,662 718,361
62 718,361 20,074 44,306 782,742
63 782,742 20,074 48,169 850,985
64 850,985 20,074 52,264 923,322
65 923,322 20,074 56,604 1,000,000
66 1,000,000 - 60,000 1,060,000
67 1,060,000 - 63,600 1,123,600
68 1,123,600 - 67,416 1,191,016
69 1,191,016 - 71,461 1,262,477
70 1,262,477 - 75,749 1,338,226

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TITLE THINK LIKE AN ACCOUNTANT

2 Click the Analysis worksheet tab to view the template.

3 Key your name in cell C2.

4 Enter the appropriate data in cells denoted by a question mark (?).

5 Use the schedule to answer question (1).

6 Follow steps 7-14 to answer questions (2) and (3).

### Click OK.

### Use the schedule to answer the questions.

Annual Contribution $ 4,024

Beginning Annual Annual Return

Annual Additions to Fund

Annual Contribution $ 20,074 4 $5716

Ending Balance by Age

Annual Annual Return

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