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The Personnel Benefits Department of the ACME company will implement a Savings Fund Plan for its...

The Personnel Benefits Department of the ACME company will implement a Savings Fund Plan for its employees in the month of January 2017. An employee is considering depositing RD $ 125,000 in said fund during a period of 2 years that would be paying 1% per month, in order to withdraw 12,500 RD $ at the beginning of each month according to monthly installment due. After 2 years you want to withdraw the accumulated balance. Define the cash flow and determine the available balance in the account after the 2 years have elapsed, deducting the withdrawals made.

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Expert Solution

So it is clear from above table that we will not able to withdraw money till the 24 month means 2 years because we are just earning $1250 as interest amount while we are withdrawing the 12500 which is 10x of our internet amount. Hence we could able to withdraw till 11 month after that balance will went to negative.

jeff jeffy answered 2 years ago
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