create a “Retirement Calculator”. The output from your calculator will be the amount that a person needs to save starting in one year’s time in order to meet their retirement goals. The inputs will be:
The number of years until retirement (which will be the number of payments that the person makes into their savings account)
The number of years that they will live in retirement (which will be the number of withdrawals that they will make from their savings account in retirement)
The discount rate.
The growth rate of their deposits (remember that g must be less than r)
The growth rate of their withdrawals (again, g must be less than r)
The amount of money that they want to withdraw from their savings account in their first year of retirement. Just an Excel sheet that clearly marks the inputs and the output. No need to explain anything this time. The discount rate is the interest rate, or the rate that you use in the present value calculations. It is the “r” in the formulas.