Question

Monthly deposits of $62.50 are made into a savings account for three consecutive years. One year later $2550 is withdrawn from the account, leaving the account empty. Draw the cash flow diagram from the bank 's perspective assuming interest is paid once per year 3. You open a savings account on January 1 with $150 deposit (call this Time 0). The account pays interest at the end of every month. Over the rest of the year, you make the following deposits: 4. Deposit Date April 4 June 6 une 9 July 12 October 9 December 7 Deposit Amount $400 $500 $100 $700 $400 $1000 Draw the cash flow diagram.

Answer 1

Ans for No 3)

Given that Monthly deposits- $62.50

Time- 3 years

End of the 4th year $2550 was drawn.

Assuming interest made once in a year= 10%

1st year; Cash Inflows

Jan	(62.5*1)	62.5
Feb	62.5*2	125
Mar	62.50*3	187.5
April	62.50*4	250
May	62.50*5	312.5
June	62.50*6	375
July	62.50*7	437.5
August	62.50*8	500
Sep	62.50*9	562.5
Oct	62.50*10	625
Nov	62.50*11	687.5
Dec	62.50*12	750
Interest 10%	750*10%=75	750+75	825

2nd Year; Cash Inflows

Jan	825+62.5	887.5
Feb	825+62.5*2	950
Mar	825+62.5*3	1012.5
April	825+62.5*4	1075
May	825+62.5*5	1137.5
June	825+62.5*6	1200
July	825+62.5*7	1262.5
August	825+62.5*8	1325
Sep	825+62.5*9	1387.5
Oct	825+62.5*10	1450
Nov	825+62.5*11	1512.5
Dec	825+62.5*12	1575
Interest 10%	1575*10%=157.5	1575+157.5	1732.5

In 3rd Year; Cash Inflows

Jan	1732.5+62.5	1795
Feb	1732.5+62.5*2	1857.5
Mar	1732.5+62.5*3	1920
April	1732.5+62.5*4	1982.5
May	1732.5+62.5*5	2045
June	1732.5+62.5*6	2107.5
July	1732.5+62.5*7	2170
August	1732.5+62.5*8	2232.5
Sep	1732.5+62.5*9	2295
Oct	1732.5+62.5*10	2357.5
Nov	1732.5+62.5*11	2420
Dec	1732.5+62.5*12	2482.5
Interest 10%	2482.5*10%=248.25	2482.5+248.25	2730.75

In 4th year;

There were no installments;

therefore Total amount with Interest 10% at the end of 4th year= 2730.75+ 2730.75*10%=3003.825

Less; amount withdrawn - 2550 (Cash Outflow)

Amount remaining- 3003.825-2550=453.825

Note; As HOMEWORKLIB RULES mandatory guidelines answering the first full question