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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?
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?
Keystrokes Display
CLEAR
18000
5.25
300
71.00 Months to deplete account.
5000
53.00
Months to reduce the account to
$5,000