Question

A person deposits $17000 in an account which earns 6% compounded quarterly. At the end of 4 years the person withdraws $4250, and at the end of 7 years they withdraw $5950. How much can be withdrawn at the end of 9 years in order to deplete the account?

Answer 1

Future Value = Present Value * (1+quarter rate)^number of quarters

Quarter Rate = 0.06/4 = 0.015

Amount at the end of four years:

Number of quarters =4*4 =16

Amount = 17000 * (1+0.015)^16 = 21572.754

Withdrawl = 4250

Amount left = 21572.754 - 4250 = 17322.754

Amount after end of 7h year:

Amount =  17322.754 *(1+0.015)^12 = 20711.399

Withdrawl = 5950

Amount left = 20711.399- 5950 = 14761.399

Amount left for withdrawl after end of 9th year:

Amount left = 14761.399 * (1+0.015)^8 = 16628.61 Answer