The plan was to leave 5000 on deposit in a savings account f

The plan was to leave $5,000 on deposit in a savings account for 15 years at 6.5% interest compounded annually. It became necessary to withdraw $1,500 at the end of the 5th year. How much will be on deposit at the end of the 15-year period?

The answer should be $10,043 but I keep coming up with a different number?

Solution

First we find total amount at end of 5th year

P=5000 r=0.065 n=5

The deposit money at the end of 5th year = 5000*(1+0.065)^5 = $ 6850.43

Now at the end of 5th year $1500 was withdrawn so the money left after 5th year = 6850.43-1500 = $5350.43

Now this amount becomes principal amount for further 10 years

So Total amount after 15years

P=5350.43 r=0.065 n=10

Total amount = 5350.43(1+0.065)^10 = $ 10,043.49

Round off then answer $10,043