Question

Derek currently has $12,179.00 in an account that pays 5.00%. He will withdraw $5,817.00 every other year beginning next year until he has taken 4.00 withdrawals. He will deposit $12179.0 every other year beginning two years from today until he has made 4.0 deposits. How much will be in the account 29.00 years from today?

please show how to answer step by step using a financial calculator

Answer 1

Solving using Financial calculator

CF0 = 12179

C01 = -5817

F01 = 1

C02 = 12179

F02 = 1

C03 = -5817

F03 = 1

C04 = 12179

F04 = 1

C05 = -5817

F05 = 1

C06 = 12179

F06 = 1

C07 = -5817

F07 = 1

C08 = 12179

F08 = 1

Then press NPV, it will ask for I, put 5 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 $31320.0410

Now to calculate FV

Put -31320.0410 in PV

N = 29

I/Y = 5

PMT = 0

compute for FV

You will get the FV = $128917.54

He will have a total of $128918 in his account after 29 years from today.