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total growth in the investment account increases over time

Two plans have been proposed for accumulating money for capital projects at Thunder Bay Lighting. One idea is to put aside $10000 per year, independent of growth. The second is to start with a smaller amount, $8000 per year, but to increase this in proportion to the expected company growth. The money will accumulate interest at 10%, and the company is expected to grow about 5% per year. Which plan will accumulate more money in 10 years?

Show all intermediate calculations and transfer results from Excel to Word but include both files, please and thank you.

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Solution Preview

Please see the attached Excel and Word files.

As you can see, the scenario where $10,000 is invested each year regardless of the company's growth rate is the best ...

Solution Summary

Examine how total growth in the investment account increases over time.