<p>You deposit $4500.00 per year at the end of each of the next 25years into an
ID: 2664340 • Letter: #
Question
<p>You deposit $4500.00 per year at the end of each of the next 25years into an account that pays 10%compounded annually. How much could you withdraw at the end of each of the 20 years following your last deposit if all withdrawls are the same dollar amount? The 25th and last deposit is made at the beginning of the 20 year period.  The first withdrawl is made at the end of the first year in the 20-year period/</p><p>a- $51983.00    b- $22128.00    c- $45987.00    d- $38323.00</p>
<p> </p>
Explanation / Answer
It is hard to read, but I think it is a multiple choice problem. At the beginning of the first year we have $0. At the end of the first year we put in $4,500. At the end of the second year we get the interest on the first $4,500, which gives $450 more or $4,950 and we put in another 4,500. Looking at the spreadsheet results, we see $9,450 is the money at the end of the second year and working our way down we see that we have $442,561.75 at the end of 25 years and then $486,817.94 when we make our first withdrawal. 4500 4950 9450 10395 14895 16384.5 20884.5 22972.95 27472.95 30220.245 34720.245 38192.2695 42692.2695 46961.49645 51461.49645 56607.6461 61107.6461 67218.4107 71718.4107 78890.25177 83390.25177 91729.27695 96229.27695 105852.2046 110352.2046 121387.4251 125887.4251 138476.1676 142976.1676 157273.7844 161773.7844 177951.1628 182451.1628 200696.2791 205196.2791 225715.907 230215.907 253237.4977 257737.4977 283511.2475 288011.2475 316812.3722 321312.3722 353443.6095 357943.6095 393737.9704 398237.9704 438061.7675 442561.7675 486817.9442 Since it is multiple choice, lets try each option starting with a middle value, $45,987 The first row is the starting money the day we withdraw our first yearly amount and then the starting money minus $45,987. The second row is the top right value times 1.1 since it is still earning 10% interest. 486817.9442 440830.9442 484914.0386 438927.0386 482819.7425 436832.7425 480516.0167 434529.0167 477981.9184 431994.9184 475194.4102 429207.4102 472128.1513 426141.1513 468755.2664 422768.2664 465045.093 419058.093 460963.9023 414976.9023 456474.5926 410487.5926 451536.3518 405549.3518 446104.287 400117.287 440129.0157 394142.0157 433556.2173 387569.2173 426326.139 380339.139 418373.0529 372386.0529 409624.6582 363637.6582 400001.424 354014.424 389415.8664 343428.8664 At the end of 20 years we have made a dent, but are nowhere near zero. The correct answer must be the higher one, choice a, but lets try it. 486817.9442 434834.9442 478318.4386 426335.4386 468968.9825 416985.9825 458684.5807 406701.5807 447371.7388 395388.7388 434927.6127 382944.6127 421239.0739 369256.0739 406181.6813 354198.6813 389618.5495 337635.5495 371399.1044 319416.1044 351357.7149 299374.7149 329312.1864 277329.1864 305062.105 253079.105 278387.0155 226404.0155 249044.417 197061.417 216767.5587 164784.5587 181263.0146 129280.0146 142208.0161 90225.01608 99247.51768 47264.51768 51990.96945 7.969452064 Yes, this works. Down to zero after twenty years with $7.97 left for the grandchildren.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.