Excel model of Ambers and Joshs savings plan

  Suppose 2 students graduate from Bentley in 2025 and both get jobs with starting salaries of $60,000. One student, Amber, is quite serious about saving and plans to save 10% of her gross salary and invest it in an S&P 500 index fund. The other student, Josh, is also serious about savings and also plans to save 10% of his gross salary, but is more conservative and plans to invest in a blended stock and bond mutual fund. Develop an excel model of Ambers and Joshs savings plan, showing 1) how much they will have in savings each year until age 62 2) compute the present value of their cumulative savings at age 62 Make the following assumptions: Assume they will be 22 when they graduate in 2025 The S&P 500 index fund Amber invests in returns 9% annually The blended stock and bond mutual fund Josh invests in returns 4% annually Their salary will increase each year by 3% Use 3% as the discount factor when computing the present value of their cumulative savings at age 62