You plan on making a $235.15 monthly deposit into an account that pays 3.2% interest, compounded monthly, for 20 years. at the end of this period, you plan on withdrawing regular monthly payments. determine the amount that you can withdraw each month for 10 years, if you plan on not having anything in the account at the end of the 10 year period and no future deposits are made to the account. a. $769.27 b. $767.23 c. $78,910.41 d. $79,120.84

First, we calculate the future value (FV) of the amount after 20 years using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:

FV = A * (((1 + r)^n – 1) / r) ................................. (1)

Where,

FV = Future value of the amount after 20 years =?

A = Monthly deposit = $235.15

r = Monthly interest rate = 3.2% / 12 = 0.00266666666666667

n = number of months = 20 * 12 = 240

Substituting the values into equation (1), we have:

FV = $235.15 * (((1 + 0.00266666666666667)^240 – 1) / 0.00266666666666667) = $78,910.41

The amount planned to be withdrawn on monthly basis can be calculated using the formula for calculating the present value (PV) of an ordinary annuity as follows:

P = PV / ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where;

P = Monthly withdrawal or payment = ?

PV = Present value = FV calculated above = $78,910.41

r = Monthly interest rate = 3.2% / 12 = 0.00266666666666667

n = number of months = 10 * 12 = 120

Substitute the values into equation (2), we have:

P = $78,910.41PV / ((1 - (1 / (1 + 0.00266666666666667))^120) / 0.00266666666666667) = $769.27

Therefore, the amount that can be withdrawn each month for 10 years is $769.27.

Learn more about the present value of an ordinary annuity here: https://brainly.com/question/17112302.

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