Question
In: Finance
An S&L pays 5% per annum compounded quarterly. Bert and Bertha are now 50 years old....
An S&L pays 5% per annum compounded quarterly. Bert and Bertha are now 50 years old. They will deposit $200 per quarter at the end of each quarter until they are 65 years old.
- How much is in their retirement account at the end of this period i.e. at 65?
- 3 months after their last deposit they start withdrawing equal amounts each quarter until they are 80 i.e. for the next 15 years Find the size of the withdrawals.
- How much cash did they deposit? How much cash did they withdraw? What was the total interest?
Solutions
Expert Solution
| Rate compounded quarterly | 5% | |
| Quarterly deposit | 200 | |
| Tenure in years | 15 | |
| a | Amount in the account | $17,714.90 |
| b | Withdrawal amount | $421.44 |
| c | Total deposits | 12000 |
| Total withdrawals | $25,286.18 | |
| Total interest | $13,286.18 |
WORKINGS
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