Question

An account is today credited with its annual interest thereby bringing the accountbalance to $12,490. The interest rate is 5.70% compounded annually. You plan tomake annual withdrawals of $1,450 each. The first withdrawal is in exactly one yearand the last in exactly 9 years. Find the account balance immediately after the lastwithdrawal.

Answer 1

Step-by-step explanation:

Let the account balance be B .

Equating the present value of money at 5.7 % discount

12490 = 1450 ( PVIFA , 5.7 , 9 ) + B ( PVIF , 5.7 , 9 )

= 1450 x 6.8938 + .6072 x B

= 9996.01 + .6072B

.6072 B = 2494

B = 4107