Question

Derek currently has \$14,222.00 in an account that pays 6.00%. He will withdraw \$5,045.00 every other...

Derek currently has \$14,222.00 in an account that pays 6.00%. He will withdraw \$5,045.00 every other year beginning next year until he has taken 5.00 withdrawals. He will deposit \$14222.0 every other year beginning two years from today until he has made 5.0 deposits. How much will be in the account 22.00 years from today?

Homework Answers

Answer #1

PV of amount = 14,220
Rate = 6%
FV of amount = 14,220*(1+6%)22 = 51242.20

FV of All 5 withdrawals = 5045*(1+6%)21 + 5045*(1+6%)19 +  5045*(1+6%)17 + 5045*(1+6%)15 + 5045*(1+6%)13 = 68851.25
FV of All 5 deposits = 5045*(1+6%)20 + 5045*(1+6%)18 +  5045*(1+6%)16 + 5045*(1+6%)14 + 5045*(1+6%)12 = 64954.01

Amount in account 22 years from today = 51242.20 - 68851.25 +  64954.01 = 47344.96

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