Could someone help me with this question? tried several times, but couldnt get t
ID: 2732769 • Letter: C
Question
Could someone help me with this question? tried several times, but couldnt get the right answer. Thanks
Suppose an individual makes an initial investment of $2700 in an account that earns 7.8%, 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). (Round your answers to the nearest cent.) How much is in the account after the last deposit is made? How much was deposited? What is the amount of each withdrawal? What is the total amount withdrawn?Explanation / Answer
FUTURE VALUE OF ONE TIME INVESTMENT AFTER 12 YEARS AMOUNT RATE 2700 7.80% USING FVFUNCTION WE CAN FIND IT $6,863.54 FUTURE VALUE OF ANNUITY OF 100 PER MONTH AMOUNT RATE PERIOD 100 0.65 144 MONTHS USING FV FUNCTION WE CAN FIND THE VALUE OF ANNUITY AFTER 12 YEARS $23,723.86 .65% PER MONTH AMOUNT AFTER THE LAST INSTALLMENT IS PAID $30,587.39 TOTAL AMOUNT DEPOSITED 17100 AMOUNT OF EACH WITHDRAWAL RATE 0.65% USING PMT FUNCTION WE CAN CALCULATE THE AMOUNT OF EACH WITHDRAWAL $617.28 PERIOD 60 MONTHS PRESENT VALUE $30,587.39 AMOUNT OF TOTAL WITHDRAWAL $37,036.70 NOTE: HERE WE HAVE ASSUMED THAT AT THE TIME OF WITHDRAWAL INTEREST RATE IS SAME AS 7.8% AND COMPOUNDED MONTHLY