+598 Josie won $ 8000 in an essay- writing contest. The money was deposited into a savings account earning 4.2% compounded monthly. She intends to leave the money for five-and-a-half years, then withdraw amounts at the end of each month for the next four years while she studies to become an entrepreneur. What will be the size of each withdrawal?
Any help with steps would be greatly appreciated. Thanks
Josie won $ 8000 in an essay- writing contest. The money was deposited into a savings account earning 4.2% compounded monthly. She intends to leave the money for five-and-a-half years, then withdraw amounts at the end of each month for the next four years while she studies to become an entrepreneur. What will be the size of each withdrawal?
Any help with steps would be greatly appreciated. Thanks
Josie should have accumulated $10,074.81 at the end of 5 1/2 years. Again, here is the formula used to calculate this: FV=PV[1 + R]^N=FV OF $1 TODAY,
Where R=Interest rate per period, N=number of periods, P=periodic payment.
PV=Present value, FV=Future value
Josie should be able to withdraw $228.38 per month, every month for 4 years. Here is the formula to calculate the payments, if you wish to check them:
PMT=PV. R.{[1 + R]^N/ [1 + R]^N - 1}=PMT NEEDED TO WITHDRAW THE ENTIRE AMT. SAVED.
