RETIREMENT 101: USING RETIREMENT PLANNING WITH EXCEL TO DEMONSTRATE INTEREST COMPOUNDING

This paper provides a lesson on compounding interest calculation as applied to retirement planning using an EXCEL spreadsheet. Detailed instructions for instructor preparation, a student assignment, the class demonstration and various methods of student debriefing are included. An ideal venue for th...

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Bibliographic Details
Published in:Journal of economics and economic education research 2017-09, Vol.18 (3), p.1-12
Main Author: Burnett, Nancy J
Format: Article
Language:English
Subjects:
Adult Learning
Adult Students
Basic Skills
Calculators
Classroom Communication
Classrooms
Compound interest
Economics Education
Homework
Interest rates
Learning Modules
Life expectancy
Medicare
Money Management
Present value
Retirement
Retirement planning
Spreadsheets
Student Research
Students
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Summary:This paper provides a lesson on compounding interest calculation as applied to retirement planning using an EXCEL spreadsheet. Detailed instructions for instructor preparation, a student assignment, the class demonstration and various methods of student debriefing are included. An ideal venue for this lesson would be an introductory finance course not specifically targeted to business majors, though this learning module fits into any course that includes a section on personal financial management or one that explores compounding interest and present/future value calculations. The basic lesson is designed for lower division courses, but additional material is provided to make it more appropriate for upper division courses including material on various investment vehicles, social security regulations and mortgage calculations. While the lesson is designed for students with minimal exposure to EXCEL, there are extensions to the lesson appropriate for students with more EXCEL experience. The classroom part of this lesson uses approximately one to one and a half hours of class time and employs an EXCEL spreadsheet available from the author. Experience has shown that this lesson has significant impact on students and has prompted several students to opt into employer provided savings plans such as 401k plans and even open their own individual retirement accounts.
ISSN:1533-3604
1533-3590