CHRISTIAN MART A.

SONCIO CEE109 – 1831

BSCE – Structural

Let’s Analyze

Activity 1: Solve the following problems and write the step-by-step procedure you did to
find what is asked.

1. An engineer who is planning his retirement has decided that he will have to
withdraw ₱10 000 from his savings account at the end of each year. How much
money must the engineer have in the bank at the start of his retirement, if his
money earns 6% per year, compounded annually, and he is planning a 12-year
retirement (say 12 annual withdrawals)?

2. An engineer is planning for a 15-year retirement. In order to supplement his

pension and offset the anticipated effects of inflation, he intends to withdraw₱5000
at the end of the first year, and to increase the withdrawal by ₱1000 at the end of
each successive year. How much money must the engineer have in his savings
account at the start of his retirement, if money earns 6% per year, compounded
annually?
3. How much money must initially be deposited in a savings account paying 5% per
year, compounded annually, to provide for ten annual withdrawals that start at
₱6000 and decrease by ₱500 each year?
4. A man has deposited ₱50 000 in a retirement income plan with a local bank. This
bank pays 9% per year, compounded annually, on such deposits. What is the
maximum amount the man can withdraw at the end of each year and still have the
funds last for 12 years?
5. A man has deposited ₱50 000 in a retirement income plan with a local bank. This
bank pays 8.75 % per year, compounded annually, on such deposits. What is the
maximum amount the man can withdraw at the end of each year and still have the
funds last for 12 years?