In: Finance
Derek wants to withdraw $11,575.00 from his account 3.00 years from today and $13,908.00 from his account 12.00 years from today. He currently has $2,838.00 in the account. How much must he deposit each year for the next 12.0 years? Assume a 6.69% interest rate. His account must equal zero by year 12.0 but may be negative prior to that. Currency: Round to: 2 decimal places.
rate = 6.69%
nper = 3
PMT = 0
FV = $11575
Using Excel :
PV = pv(rate,nper,pmt,pv,fv)
= pv(6.69%,3,0,-11575)
= $9531.25
rate = 6.69%
nper= 12
PMT = 0
FV = $13908
PV = pv(rate,nper,pmt,pv,fv)
= pv(6.69%,12,0,-13908)
= $6394.11
Rate = 6.69%
Nper = 12
PV = $9531.25+$6394.11-$2838 = $18763.36
FV = 0
PMT = pmt(rate,nper,pv,fv)
= pmt(6.69%,12,-18763.36,0)
= $2323.47
He must deposit $2323.47 each for the next 12 years