# Bank deposit account [closed]

Question: Tom puts \$10,000 into a bank account that pays an annual effective interest rate of 4% for ten years. If a withdrawal is made during the first five and one-half years, a penalty of 5% of the withdrawal amount is made. Tom withdrawals K dollars at the end of each of 4, 5, 6 and 7 years. The balance in the account at the end of year 10 is \$10,000. Calculate K

Part of the calculations: If no withdrawals than total amount is 10K(1.04)^10 =\$14802.42

\$14802.42-\$10000 = \$4802.20 has been withdrawn

Withdrawals = \$4802.20 = x(1.05) + x(1.05) + x + x

I know this is wrong, but how far wrong?

## closed as off-topic by Dheer, Michael, Pete B., Nathan L, MD-TechOct 30 '17 at 13:09

This question appears to be off-topic. The users who voted to close gave this specific reason:

• "Questions about accounting are off-topic unless they relate directly to personal finance or investing from an individual's perspective." – Dheer, Michael, Pete B., Nathan L, MD-Tech
If this question can be reworded to fit the rules in the help center, please edit the question.

• A homework problem? – RonJohn Oct 25 '17 at 15:53
• Each withdrawal reduces future interest as well, so \$4,802.20 is irrelevant. – Hart CO Oct 25 '17 at 16:12
• That's what I thought. – Mark Oct 25 '17 at 16:15

``````((((10000 x 1.04^4 - 1.05K) x 1.04 - 1.05K) x 1.04 - K) x 1.04 - K) x 1.04^3 = 10000