Question

Derek currently has $14,412.00 in an account that pays 6.00%. He will withdraw $5,344.00 every other year beginning next year until he has taken 7.00 withdrawals. He will deposit $14412.0 every other year beginning two years from today until he has made 7.0 deposits. How much will be in the account 22.00 years from today? Submit Answer format: Currency: Round to: 2 decimal places.

Answer 1

Given Figure Unit Current or opening deposit 14412 $ Withdrawal upto 7 withdrawal Deposit upto 7 deposit rate of interest 5344 $ 14412 $ 6% Solution We shall make schedule of account Withdrawal Closing Year Opening Interest Deposit 864.72 5344 9932.72 1 14412 9932.72 595.96 14412 24940.68 24940.68 5344 21093.12 1496.44 14412 21093.12 1265.59 36770.71 36770.71 2206.24 5344 33632.95 2017.98 33632.95 14412 50062.93 50062.93 3003.78 5344 47722.71 47722.71 2863.36 14412 64998.07 5344 64998.07 3899.88 63553.95 3813.24 10 63553.95 14412 81779.19 4906.75 11 81779.19 5344 81341.94 100634.46 12 81341.94 4880.52 14412 100634.46 6038.07 101328.53 6079.71 13 5344 101328.53 14 14412 121820.24 121820.24 7309.21 129129.45 7747.77 15 129129.45 16 136877.22 17 136877.22 8212.63 145089.85 8705.39 153795.24 18 145089.85 153795.24 9227.71 19 163022.95 9781.38 172804.33 20 163022.95 172804.33 10368.26 21 183172.59 183172.59 10990.36 22 194162.95 Note: Here withdrawal and deposit are considered to be made at year end Hence, balance at the end of 22 year will be 194162.95 $