Three thousand dollars is deposited into an account paying 10% annually to provide three annual withdrawals of $1,206.34 beginning in one year. How much remains in the account after the second payment has been withdrawn?
A) $1,326.97
B) $1,206.34
C) $1,096.69
D)$587.32

Question

Quizplus · Accepted Answer

FV_Year₁ = PV(1 + r) - WithdrawalFV_Year₁ = $3,000(1.1) - $1,206.34FV_Year₁ = $2,093.66FV_Year₂ = FV_Year₁ (1 + r) - WithdrawalFV_Year₂ = $2,093.66(1.1) - $1,206.34FV_Year₂ = $1,096.69

Three Thousand Dollars Is Deposited into an Account Paying 10