Question 1200915
she got 19000 when she was 9.
that was invested at 2.5% per year, compounded monthly, until she turned 17.
thhat's the future value of 19000 * (1 + .025/12) ^ (8 * 20 = 23201.82.
she will have 23,201.82 available to her when she turns 17.
she puts that money in a college fund that is earning 3% per year, compounded annually.
she will be withdrawing from that fun for the next 4 years.
the amount that she can withdraw at the end of each year is equal to 6241.92


here are what the clculations look like, usimng the financial calculator at <a href = "https://arachnoid.com/finance/" target = "_blank">https://arachnoid.com/finance/</a>


first the investment of 19000 at 2.5% interest per year, compounded monthly, for 8 years.


<img src = "http://theo.x10hosting.com/2023/081001.jpg">


the initial investment is negative because it is money going out.
the future value of the investment is positive because it is money coming in.
the annual interest rate of 2.5% per year is divided by 12 to get the monthly interest rate.
the number of years is multiply by 12 to get the number of months.


next the withdrawal at 3% interest per year, compounded annually, for 4 years.


<img src = "http://theo.x10hosting.com/2023/081002.jpg">


the future vlaue of the investment is placed into the present value field.
it is positive, because it is money coming.
the payment at the end of each year is negative because it is money going out.
the number of years is 4 and the interest rate per year is 3%.


note that she starts earning interest as soon as she puts her money into the college fund.
if the money is invested when she turns 17, she will have earned 3% interest by the end of that year.
this is what the yearly transactions look like in excel.


<img src = "http://theo.x10hosting.com/2023/081003.jpg">