You Wish to Have $200,000 at the End of Twenty

question 216

Short Answer

You wish to have $200,000 at the end of twenty years. In the last five years, you withdraw $1,000 annually at a rate of 3.8% compounded quarterly. During the middle ten years, you contribute $500 monthly at a rate of 2.8% compounded semi-annually. Given this information, determine the initial deposit that has to be made at the start of the first five years at a rate of 4% compounded monthly.

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Definitions:

Bony Fishes

Fish that have skeletons primarily composed of bone tissue, as opposed to cartilaginous fishes; this group includes the vast majority of current fish species.

Placoderms

A group of extinct jawed fishes.

Extinct

The state in which a species no longer exists anywhere on Earth, often due to environmental changes, predation, or human activities.

Jawless Fish

A group of fish without jaws, such as hagfish and lampreys, representing early forms of vertebrate life.