Math

posted by .

Please help me to solve it, today is mydue day !

Suppose an individual makes an initial investment of $2400 in an account that earns 8%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to $0)

How much is in the account after the last deposit is made?

i used this Formula but wrong ?

A= R(1-(1+i)n0/i

  • Math -

    You are "moving" a single payment plus an annuity up on the time graph for 144 periods
    i = .08/12 = .00666667

    Amount at the end of 12 years
    = 2400(1.00666667)^144 + 100(1.00666667^144 - 1)/.00666667
    = 6248.134 + 24050.841
    = 30298.98

    If you want the monthly withdrawals for the next 5 years, let that withdrawal be x

    30298.975 = x( 1 - 1.0066667^-60)/.0066667
    x = 614.35

  • Math -

    tks so much

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Algebra

    An initial investment of $480 is invested for 4 years in an account that earns 16% interest, compounded quarterly. What is the amount of money in the account at the end of the period?
  2. math

    An initial investment of $1240 is appreciated for 17 years in an account that earns 8% interest, compounded continuously. Find the amount of money in the account at the end of the period.
  3. math

    Suppose an individual makes an initial investment of $1100 in an account that earns 7.5%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this …
  4. Math

    An initial investment of $1000 is appreciated for 8 years in an account that earns 9% interest, compounded annually. Find the amount of money in the account at the end of the period
  5. Math

    Suppose an individual makes an initial investment of $2400 in an account that earns 8%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual …
  6. math

    Suppose that you have $12,500 to invest over a 4 year period. There are two accounts to choose from: 4.5% compounded monthly or 4.3% compounded continuously. a. Write the formula for the first account’s compound interest for n compounding …
  7. college math

    An initial investment of $1000 is appreciated for 4 years in an account that earns 6% interest, 2) compounded semiannually. Find the amount of money in the account at the end of the period.
  8. everest online

    2. At the end of each year a self-employed person deposits $1,500 in a retirement account that earns 10 percent annually. a) How much will be in the accountant when the individual retires at the age of 65 if the contributions start …
  9. algebra

    An initial investment of $480 is appreciated for 7 years in an account that earns 15% interest, compounded quarterly. Find the amount of money in the account at the end of the period.
  10. Math

    Suppose an individual makes an initial investment of $1100 in an account that earns 7.3%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this …

More Similar Questions