you are going to wthdraw $5,000 at the end of ea yr for the nxt 4 yrs from an acct that pays interest at 9%?

Question

compounded annually. The account balance will reduce to zero when the last withdrawal is made. How much interest will you earn on the account over the four year life?

Answer 1

You'd have started with:

16,198.60 opening balance
1,457.87 Yr 1 interest at 9%
(5,000.00) Yr 1 withdrawal
12,656.47 Bal c/f
1,139.08 Yr 2 int at 9%
(5,000.00) Yr 2 withdrawal
8,795.55 Bal c/f
791.60 Yr 3 int at 9%
(5,000.00) Yr 3 withdrawal
4,587.15 Bal c/f
412.85 Yr 4 int at 9%
(5,000.00) Yr 4 withdrawal
NIL bal c/f

So if you want just the interest, add
1457.87 + 1139.08 + 791.60 + 412.85 = 3,801.40

Hope I got that right!

Answer 2

I say $3802