Question

6. Jason's grandfather deposited $4,275 into an account to pay his college expenses. The account earns 2%

interest every month. After two years, Jason transfers the entire amount into an account that does not gain
interest, and then withdraws $475 each month thereafter to meet his costs. How long will it take Jason to
spend all of the money?

Answer 1

15 months.

Explanation:

4275 x 1.02^24 = 6876.07

2 years total = $6876.07

6876.07 / 475 = 14.4759368421

= 14.5 months

= 15 months.