Scenario: Liam is saving for a down payment on a house. He’s currently working o

Scenario:

Liam is saving for a down payment on a house. He’s currently working online and independently managing his finances. Let’s help him figure out how much he’ll have saved by the end of year 3!

Information:

• Liam has $35,000 saved already.
• He expects a bonus of $12,000 at the end of year 1.
• He plans to increase his monthly savings contributions starting in year 2.
• He’ll contribute $2,000 per month in year 2 and year 3, totaling $24,000 per year.
• Liam will invest all his savings in a mutual fund with a steady 5% annual return compounded yearly. (Compounded interest means interest is earned on both the initial investment and the accumulated interest from previous years.)

Goal:

Calculate how much money Liam will have in his account at the end of year 4 assuming he sticks to his savings plan and the investment performs as expected.

1. Use Microsoft Excel:
   • Open Microsoft Excel and create a new spreadsheet.
   • Use the provided information about Liam’s savings plan to create a table similar to the one in the video that tracks his contributions each year.
2. Calculate Future Value:
   • Remember, the interest is compounded annually. Use Excel’s built-in functions or formulas to calculate the future value of Liam’s savings at the end of each year.
   • There are helpful Excel tutorials online that explain how to calculate future value with compound interest.
3. Organize and Present Your Work:
   • Make sure your Excel sheet is easy to understand. Include clear labels for rows and columns and any necessary formulas you used.