Math CentralQuandaries & Queries


Question from Jules, a student:

R 20 000 is deposited in the bank,at the end of each year R 5 000
is withdrawn from it, the interest is 13 percent compounded monthly.
Calculate how many years that person will be able to use his/her money ?

Hi Jules.

Use the formula for annuities.

P is the principal (R 20 000)
R is the withdrawal (R 5 000)
i is the interest rate (0.13)
and n is the number of withdrawals. That's what you need to find.

You'll find it by re-arranging the equation and using logarithms, or you could estimate it by graphing an exponential function and finding the intersection with a line.

Write back if you need more help.

Stephen La Rocque.

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