Question

Uriah Heep celebrated his 18th birthday by opening a savings account at the Thames River Bank and depositing

​$1,700.

He continued to deposit the same amount on every subsequent birthday until he was

31

years old. After depositing

​$1,700

on his

31st

birthday Uriah decided to abandon his savings plan. He never saved​ again, but he left the accumulated savings in the bank account. The bank paid an interest rate of

10.5​%.

When Uriah turned​ 65, he withdrew the money from the bank. What was the amount of his​ withdrawal?

What was the amount of​ Uriah's withdrawal when he turned​ 65?

Answer 1

Solution:-

Time (n) = 31st Birthday - 17th Birthday = 14 years

First we need to calculate total Amount Abandon to his saving plan-

Amount on his 31st Birthday =

Amount on his 31st Birthday =

Amount on his 31st Birthday =

Amount on his 31st Birthday =

Amount on his 31st Birthday = $1,700 * 29.01361

Amount on his 31st Birthday = $49,323.13

Total Amount Abandon to his saving plan as on 31st Birthday is $49,323.13

To Calculate the amount of​ Uriah's withdrawal when he turned​ 65 -

Time (n) = 65th Birthday - 31st Birthday = 34 years

Withdarwal Amount = Amount on his 31st Birthday * (1 + r )n

Withdarwal Amount = $49,323.13 * (1 + 0.105 )34

Withdarwal Amount = $49,323.13 * 29.8069

Withdarwal Amount = $14,70,171.78

The amount of​ Uriah's withdrawal when he turned​ 65 is amounting to $14,70,171.78.

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