Question

A person deposits $100 per month into a savings account for 2 years. If $75 is withdrawn in months 5, 7 8 in addition to the deposits), construct the cash flow diagram to determine how much will be in the account after 2 years at i = 6% per year, compounded quarterly . Assume there is no interperiod interest .

Answer 1

Month	(A) Cash Inflow               (Deposit) (Amount in $)	(B) Cash Outflow (Withdwarl)   (Amount in $)	C Interest (Amount in $)	(D) Cummulative balance (A-B+C) (Amount in $)
1	100	0		100
2	100			200
3	100		18	318
4	100			418
5	100	75		443
6	100		33	576
7	100	75		601
8	100	75		626
9	100		44	769
10	100			869
11	100			969
12	100		64	1133
13	100			1233
14	100			1333
15	100		86	1519
16	100			1619
17	100			1719
18	100		109	1928
19	100			2028
20	100			2128
21	100		134	2362
22	100			2462
23	100			2562
24	100		160	2822

Balance in account at the end of 2 years is $.2,822/-