Two equal deposits made 20 and 21 years ago, respectively,will allow a retiree t

Question

Two equal deposits made 20 and 21 years ago, respectively,will allow a retiree to withdraw $10,000 now and $10,000 per yearfor 14 more years. If the account earned interest at 10% peryear, how large was each deposit?
any help would be great, will rate lifesaver even if you justset up the solution Two equal deposits made 20 and 21 years ago, respectively,will allow a retiree to withdraw $10,000 now and $10,000 per yearfor 14 more years. If the account earned interest at 10% peryear, how large was each deposit?
any help would be great, will rate lifesaver even if you justset up the solution

Explanation / Answer

This is a very complicated question and I maybe incorrect. Iassume that interest rate still apply regardless of the retireewithdrawing money. First I set the money that he deposited 21 years ago to bex Then at the end of the 21st years he would have 1.1xbecause of the interest Then he added x money again and you will have 2.1x. Next you plug it into the formula: P(1+r/n)^(nt) to find the amount of money he has now You let P equal 2.1x which is his starting amount             Requal .1 which is the interest rate in decimal             Nequal 1 which is the amount of time he is getting interest everyyear in this problem it is only one time every year             Tequal 20 which is the amount of years he is getting the interestfor which is 20 years When you plug it into the formula you get 14.12774989x Afterward since he is taking out 10,000 every years andinterest rate still apply you will plug it into this formula andsince by the end of 14 years he won't have any money left you setit to 0. 1.1^14(14.12774989x)-1.1^14(10,000)-1.1^13(10,000)-1.1^12(10,000)-1.1^11(10,000)-1.1^10(10,000)-1.1^9(10,000)-1.1^8(10,000)-1.1^7(10,000)-1.1^6(10,000)-1.1^5(10,000)-1.1^4(10,000)-1.1^3(10,000)-1.1^2(10,000)-1.1(10,000)=0 When you solve for x you get $5735.77269 This means that the deposit was $5735.77 If you have a question about anything please ask away.

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