Question

You plan to make a lump-sum deposit of $6000 now into an investment account that pays 8% per year, and you plan to withdraw an equal end-of-year amount of $1000 for 6 years, starting next year. At the end of the sixth year, you plan to close your account by withdrawing the remaining money. Define the engineering economy symbols involved.  

Answer 1

Deposit amount = $6,000

Year end payment = $1,000

Duration of withdrawal = 6 years

Here is the expanation of the below table using four variables:

B = A * 1.08

C = 1,000

D = B - C

Year	Beginning Value	Rate of interest	Value with interest earned on it	Amount Withdrawal	Money available at the end of year
1	A = 6000	8%	B = 6480	C = 1000	D = 5480
2	5480	8%	5918.4	1000	4918.4
3	4918.4	8%	5311.9	1000	4311.9
4	4311.9	8%	4656.8	1000	3656.8
5	3656.8	8%	3949.4	1000	2949.4
6	2949.4	8%	3185.3	3185.3	0.0