Question

4. A company deposits $20000 in a bank at the end of every year for 10 years, The company makes no subsequent payment for the next 8 years but withdraws $25000 at the end of 18 years. How much would be in the account at the end of 20 years? The bank pays 8% interest compounded annually. (ii) How much annual deposit should be made if your goal is to have $25,000 at the end of 20 years?

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Answer 1

Q i	FV of deposits at end of year 10	$289,731.25
	Fv of the amount at end of year 18	$536,272.32
	Amount after withdrawal	$511,272.32
	Amount at the end of year 20	$596,348.04
ii	Annual deposit required	$546.31

Workings

AutoSave Off Book1- Excel Sign in Comments Share File Home Formulas Review View Help OTell me what you want to do Insert Draw Page Layout Data Σ X Insert A A Calibri 11 General Delete Sort & Find & Filter Select Conditional Format as Cell Paste A B IU E- ΞΞΞΞΕ- % Format T T Formatting Table Styles Clipboard Font Alignment Number Styles Cells Editing г. A2 Q i A C D E FV of deposits at end of year 10 2 Qi =FV(8%,10,-20000) =FV(8%,8,-C2) Fv of the amount at end of year 18 Amount after withdrawal -C3-25000 Amount at the end of year 20 FV(8%,2,-C4) 5 6 7 ii Annual deposit required PMT(8%,20,-25000) 8 9 10 11 12 13 14 15 16 17 Shee. Sheet6 Sheet7 Sheet8 Sheet1 Sheet4 Sheet3 Sheet5 Sheet9 +100 % Ready E P3 ENG (? 6:39 AM