Question

Derek currently has $10,773.00 in an account that pays 5.00%. He will withdraw $5,493.00 every other year beginning next year until he has taken 6.00 withdrawals. He will deposit $10773.0 every other year beginning two years from today until he has made 6.0 deposits. How much will be in the account 29.00 years from today?

Please explain steps in detail, thanks!

Answer 1

The total money in the account 29.00 years from today = $  133,419.67

Please see the table below. Please be guided by the second row to understand the mathematics. The row highlighted in yellow contains your answer. Figures in parenthesis, if any, mean negative values. All financials are in $.

Year	Cash flows	Years to maturity	Future Value
t	C	n = 29 - t	FV = C x (1 + 5%)^n
0	10,773.00	29.00	44,343.13
1	(5,493.00)	28.00	(21,533.27)
2	10,773.00	27.00	40,220.52
3	(5,493.00)	26.00	(19,531.31)
4	10,773.00	25.00	36,481.20
5	(5,493.00)	24.00	(17,715.47)
6	10,773.00	23.00	33,089.53
7	(5,493.00)	22.00	(16,068.46)
8	10,773.00	21.00	30,013.17
9	(5,493.00)	20.00	(14,574.56)
10	10,773.00	19.00	27,222.83
11	(5,493.00)	18.00	(13,219.56)
12	10,773.00	17.00	24,691.91
Total			133,419.67