1. What lump sum was deposited first in a bank that offers a 5% interest compounded monthly to be able to withdraw 4605 birr per month at the end of each month for 13 years?

Question

1.	What lump sum was deposited first in a bank that offers a 5% interest compounded monthly to be able to withdraw 4605 birr per month at the end of each month for 13 years?

Tammy · Answer

monthly rate = .05/12 = .0041666... n = 12*13 = 156 withdrawal = 4605 Present value = 4605( 1 - 1.0041666..^-156)/.0041666... = 527455.34