if your daughter wants to earn $215,000 within the next twenty-three years and salaries grow at 4.45% per year, at what salary should she start to reach her goal?

Question

Teagan Spencer

Business

13 December, 17:51

if your daughter wants to earn $215,000 within the next twenty-three years and salaries grow at 4.45% per year, at what salary should she start to reach her goal?

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Answers (1)

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Chaim Turner · Answer 1

Answer: $789,84.93

Using Microsoft Excel, the starting salary can easily be obtained. But we will use the method of trial and error here. We need five columns with the following inputs:

1. For the no. of years (1-23)

2. The salary at the start of the year (4.45% added)

3. The fixed interest of 4.45%

4. The product of salary for the corresponding year and 4.45%, and

5. The sum of the salary for the previous year and the current year plus interest

By guessing/inputting (trial and error) any amount in the first cell of column 2, you can arrive at the ending balance of $215,000 in the 5th column rightmost bottom.