Question

The college invests $450,000 into an account earning 5% interest compounded monthly.

If the college withdraws $1,800 from this account every month to provide emergency financial assistance to students, how long will it take for the college to deplete all the money of the account?

Explain.

Please show your work if possible and label answer. Thank you.

Answer 1

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer 2 The correct answer 3 The whole money can never be depleted and monthly withrawal can be made for n number of times 5 Explaination 6 The account in which $ 450000, earns interest at 5% compounded monthly, 7 so interest for 1 month 8 = 450000*5%*1/12 9 = $ 1875 Since the interest earned is more than amount withrawn monthly, so it means original amount will never be 11 depleted, instead it will grow because whole of the interest earned is not being withdrawn 13 So the answer is 14 The whole money can never be depleted and monthly withrawal can be made for n number of times 17