Parents deposit $5,000 into a savings account at the end of each year for 22 years to help their child pay for college. The savings account pays 10% interest per year, compounded monthly. The child withdrawals an equal sum twice per year while in college (years 19 through 22). After the last withdrawal at the end of year 22, there is $8,000 remaining in the account. How much was each semi-annual withdrawal in year 19 through 22? Express your answer in $ to the nearest $100.

Parents deposit $5,000 into a savings account at the end of each year for 22 years to help their child pay for college. The savings account pays 10% interest per year, compounded monthly. The child withdrawals an equal sum twice per year while in college (years 19 through 22). After the last withdrawal at the end of year 22, there is $8,000 remaining in the account. How much was each semi-annual withdrawal in year 19 through 22? Express your answer in $ to the nearest $100.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section6.1: Why Save?

Problem 6R

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Question

Parents deposit $5,000 into a savings account at the end of each year for 22
years to help their child pay for college. The savings account pays 10%
interest per year, compounded monthly. The child withdrawals an equal sum
twice per year while in college (years 19 through 22). After the last
withdrawal at the end of year 22, there is $8,000 remaining in the account.
How much was each semi-annual withdrawal in year 19 through 22? Express
your answer in $ to the nearest $100.

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