# Investing for Retirement

#### Summary

In this Spreadsheets Across the Curriculum activity, students build spreadsheets to study the
effect of compound interest on accounts into which they deposit savings. They build a
spreadsheet to examine the two basic cases: the future value of a single deposit, and the
future value of an annuity. In both, they use the mathematical equation for future value to do
the calculation, not the buiilt-in Excel function. The intention is for the students to see and
work with the underlying mathematics. They apply their spreadsheets to a variety of problems,
including the following question: For a given interest rate, how much does one need to deposit
every year to accumulate two million dollars in the account at the time of retirement?

## Learning Goals

- Read about the Rule of 72 and build a spreadsheet to apply it.

- Read about the future value of a present sum and build a spreadsheet that applies the
equation for it to calculate the growth of a one-time investment.

- Read about the future value of an annuity and build a spreadsheet that applies the equation
for it to calculate the growth of an account into which one makes a regular deposit.

- Calculate the amount of the annual deposit needed to retire with $2-million in the account.

- Learn how compound interest relates to doubling rate.

- Learn how to benefit personally from exponential growth.

- Learn the future value of disciplined savings.

## Context for Use

## Description and Teaching Materials

- Microsoft Office 1997-2003 version: PowerPoint SSAC2007:HG179.JM2.1 (PowerPoint 597kB May27 10)
- Microsoft Office 2007 version: PowerPoint SSAC2007:HG179.JM2.1 (PowerPoint 2007 (.pptx) 514kB May27 10)

The module is a PowerPoint presentation with embedded spreadsheets. If the embedded spreadsheets are not visible, save the PowerPoint file to disk and open it from there.

The above PowerPoint files are the student version of the module. An instructor version is available by request. The instructor version includes the completed spreadsheet. Send your request to Len Vacher (vacher@usf.edu) by filling out and submitting the Instructor Module Request Form.