Question

Derek currently has $10,906.00 in an account that pays 6.00%. He will withdraw $5,571.00 every other year beginning next year until he has taken 6.00 withdrawals. He will deposit $10906.0 every other year beginning two years from today until he has made 6.0 deposits. How much will be in the account 22.00 years from today? WITH CALCULATOR

Answer 1

Solving using Financial calculator, Lets us first feed all the value in financial calculator

CF0 = 10906

C01 = -5571

F01 = 1

C02 = 10906

F02 = 1

C03 = -5571

F03 = 1

C04 = 10906

F04 = 1

C05 = -5571

F05 = 1

C06 = 10906

F06 = 1

C07 = -5571

F07 = 1

C08 = 10906

F08 = 1

C09 = -5571

F09 = 1

C10 = 10906

F10 = 1

C11 = -5571

F11 = 1

C12 = 10906

F12 = 1

Then press NPV, it will ask for I, put 6 and enter. press down arrow, and you will see NPV = 0.00. To get the present value of the cash flows, press CPT. We find that the present value is $31258.15

Now to calculate FV

Put -31258.15 in PV

N = 22

I/Y = 6

PMT = 0

compute for FV

You will get the FV = $112639.90

He will have a total of $112639.90 in his account after 22 years from today.