SOLUTION: TC is planning to build his new house. To meet the building expenses,he wants to deposit enough money in an account to be able to withdraw P10000 each month for the next 6 months.t

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Question 925620: TC is planning to build his new house. To meet the building expenses,he wants to deposit enough money in an account to be able to withdraw P10000 each month for the next 6 months.the account pays 12% interest per year compounded monthly.how much should TC deposit in the account today to have enough for these 6 withdrawals?
Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
The formula is +A+=+P%2A%28+1+%2B+r%2Fn+%29%5E%28n%2At%29+
My view of this is that if TC draws money
out at a faster rate than it is collecting
interest, then that seems to violate his
agreement to leave the principle in for a year.
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So my view is that TC should only draw out
interest in 6 withdrawals
+10000%2A6+=+60000+ is the total he wants to
withdraw
+A+=+P%2A%28+1+%2B+.12%2F12+%29%5E%28+12%2A1%29+
+A+=+P%2A1.01%5E12+
+A+=+1.1268P+
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The actual interest accumulated in a year is:
+1.1268P+-+P+=+.1268P+
I want +600000+=+%28+.1268P+%29+%2F+2+ ( a half-year )
+.0634P+=+60000+
+P+=+946372.24+
TC needs to deposit $946,372.24 today
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DEFINITELY get a 2nd opinion on this. I think my
approach is right, but I could be out in left field, too.
Hope it helps.