Number of Periods to Deplete a Savings Account or to Reach a Specified Balance.

Given the current value of a savings account, the periodic interest rate, the amount of the periodic withdrawal, and a specified balance, this procedure determines the number of periods to reach that balance (the balance is zero if the account is depleted).

1.Press and press CLEAR .

2.Key in the value of the savings account and press .

3.Key in the periodic interest rate and press .

4.Key in the amount of the periodic withdrawal and press .

5.Key in the amount remaining in the account and press . This step may be omitted if the account is depleted (FV=0).

6.Press to determine the number of periods to reach the specified balance.

Example: Your savings account presently contains $18,000 and earns 5 1/4% compounded monthly. You wish to withdraw $300 a month until the account is depleted. How long will this take? If you wish to reduce the account to $5,000, how many withdrawals can you make?

Keystrokes Display

CLEAR

18000

71.00

Months to deplete account.

 

 

5.25

300

5000

53.00

Months to reduce the account to

$5,000

 

Periodic Deposits and Withdrawals

This section is presented as a guideline for evaluating a savings plan when deposits and withdrawals occur at irregular intervals. One problem is given, and a step by step method for setting up and solving the problem is presented:

Example: You are presently depositing $50 and the end of each month into a local savings and loan, earning 5 1/2% compounded monthly. Your current balance is $1023.25. How much will you have accumulated in 5 months?

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