Question

A contractor purchased an equipment with a guarantee for 3 years so he deposited $10,000 in the bank to cover the total maintenance cost. He will start withdrawing the maintenance cost of $ 1000 by the end of the 3rd year for 5 years. What will be the remaining amount in the bank at the end of the 10th year from now assuming the bank pays 6 percent compounded annually?

Answer 1

rate positively ..

	i	ii	iii=i*6%	iv=i-ii+iii
Year	Beginning value	Withdraw	Interest earned	ending balance
0				10,000.00
1	10,000.00		600.00	10,600.00
2	10,600.00		636.00	11,236.00
3	11,236.00	1,000.00	674.16	10,910.16
4	10,910.16	1,000.00	654.61	10,564.77
5	10,564.77	1,000.00	633.89	10,198.66
6	10,198.66	1,000.00	611.92	9,810.58
7	9,810.58	1,000.00	588.63	9,399.21
8	9,399.21		563.95	9,963.16
9	9,963.16		597.79	10,560.95
10	10,560.95		633.66	11,194.61
Answer =				11,194.61