Question 1187334: 4. You are planning to deposit $15,000 into a bank account at the end of each year for 5 years. The bank account earns 7.5% compounded annually. After the four years (i think you meant five), you plan to withdraw $10,000 and transfer the balance to an account that earns 6% interest per year compounded semiannually and will remain in the account for 3 years. How much will be in your account at the end of the 8 years?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! this lends itself to excel analysis.
this is the output of my efforts there.
i think you meant after the 5 years.
i'll assume that's what you meant because 5 + 3 = 8.
if it's not what i assumed, then please correct me and i'll try again.
here's my excel analysis.
for the first give year, you are depositing 15000 at the end of each year.
at the end of year 1, you have 0 * 1.075 + 15000 = 15000
at the end of year 2, you have 15000 * 1.075 + 15000 = 31125
at the end of year 5, you have 67093.83 * 1.075 + 5000 = 77125.87
you only have 5000 deposit because you withdraw 10000.
15000 deposit minus 10000 withdrawal equals a net deposit of 5000.
77125.87 is the remaining balance in the account that is then transferred to the new account that is earning 6% a year compounded semi-annually.
at the end of year 5.5, you have 77125.87 * 1.03 = 79439.64.
this ame procedure continue until, at the end of year 8, you have 89410.02 * 1.03 = 92092.32.
92092.32 is what you have at the end of the 8th year.
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