Question

Tom and Jerry each make deposits of 1200 at the end of each year for 30 years. Starting at the end of the 31st year, Tom makes annual withdrawals of X for 20 years and Jerry makes annual withdrawals of Y for 20 years. Both funds have a balance of 0 after the last withdrawal. Tom's fund earns an annual effective interest rate of 6%. Jerry's fund earns an annual effective interest rate of 9%. Calculate Y + X:

(DO NOT USE EXCEL) - (My answer from using excel is $26,189.60. Need help visualizing the answer on pen and paper.)

Answer 1

As per manual calculation answer is $26190.96. which is almost equal to the answer using excel.

TOM JERRY Annual Deposits(A)=$1200 Annual Deposito (A) = $1200 n = 30 years n = 30 year r= 6% =0.06 r=9x=0.09 Future Value (after 30 years) = 4 [(1+2 3"-1] where r is the rate of interest for Tom. Fvos ho y (1+0.0096.13 FU.c.12.09 [170.09.2013 FU= 1200 x 4.7434 FU = 1200x12:2676 Fu=$94869.82 for Jerry I Fu= $ 163509 ] Let us suppose, Tom makes annual withdrawl of A, and Jersy makes annual withdrawl of Az. Jerry then Tom PV = A[ 1 - Tarn 94869= A L'- 4+0.0020] PU - AL - 1. ] Intercom - they are] → 948692 0.6882 &.163569= 0.06 A2 x 0.8215 0.og A, - 94869 0.66 0.6882 Az = 163569%0.09 0.8215 A, = 8271.05 Age 17919.91 A, +2 2 2826190.96)