Chapter 5.3, Problem 25E

Mr. and Mrs. Gonzales set up a TDA to save for their retirement. They agreed to have $\$100$ deducted from each of Mrs. Gonzales’s biweekly paychecks, which will earn $8\frac{1}{8}\%$ interest.

a Find the future value of their ordinary annuity if it comes to term after they retire in $35\frac{1}{2}\text{years}$.

b. After retiring, the Gonzales family convert their annuity to a savings account, which earns $6.1\%$ interest compounded monthly. At the end of each month, they withdraw $\$650$ for living expenses. Complete the chart in Figure $5.12$ for their postretirement account.

Month Number	Account Balance at Beginning of the Month	Interest for the month	With-drawal	Account Balance at End of the Month
1
2
3
4
5

Figure $5.12$ Chart for Exercise 25