A former smoker wants to calculate how much money he could have saved if he had...

A former smoker wants to calculate how much money he could have saved if he had saved the $8 per pack per day in a bank account instead. He assumes that he could have deposited $240 per month in an account earning 10% interest for the 17 years he smoked.
1. Assuming that he starts with a balance of $0 and makes the deposit at the end of every month, how much money could he have saved at the end of 17 years?
  1. How much total did he deposit?
  2. How much total interest did he earn?
2. Starting with the account balance at the end of the 17 years in a. how much money could he have if he left the money (with no more deposits) in the account for another 30 years until he turned 65?
  1. How much total interest has he earned on his deposits?
3. Starting with the balance at the end of the 30 years in b. how much can he then start withdrawing per month so that he’s withdrawn it all at the end of 20 years.
  1. How much total has he withdrawn?
  2. How much total did he earn on his deposit?

Expert Solution

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jeff jeffy answered 1 year ago

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