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December 11th, 2010, 12:14 PM   #1
Joined: Dec 2010

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Annuity question with odd withdrawal period.

Hi guys, I'm working through an annuity problem for one of my classes and am having an extremely difficult time formulating an equation to represent the accumulation in this scenario.

Starting January 1, 2011 you deposit 100 into an accounter earning 10% nominal annual interest with interest credited the last day of each month. Every year on March 10th you withdraw 1000. The initial balance in the account is 1000, and fractions of a month earn simple interest.

What is the equation that describes this situation? I am really struggling as I don't know how to use annuities when the withdrawals are every year instead of every month and on such an odd day of March 10th each year.

Help please...
Justine@Purdue is offline  

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