Question

Derek currently has $13,896.00 in an account that pays 6.00%. He will withdraw $5,447.00 every other year beginning next year until he has taken 5.00 withdrawals. He will deposit $13896.0 every other year beginning two years from today until he has made 5.0 deposits. How much will be in the account 26.00 years from today?

Answer 1

Interest for each year is calculated on the beginning amount, since the withdrawals and deposits are made at the end of the year

Ending amount each year = beginning amount + deposit - withdrawal + interest

Beginning amount each year = ending amount of previous year

Amount in account 26 years from today will be $195,238.56