Starting six months after her grandson Robin's birth, Mrs. Devine made deposits of
Robin will receive
Finally, we find that Robin will receive approximately
Step 1 :First, we calculate the future value of the deposits made by Mrs. Devine using the formula for the future value of an ordinary annuity:
Step 2 :Next, we calculate the present value of the withdrawals that Robin will receive using the formula for the present value of an ordinary annuity:
Step 3 :We know that the present value of the withdrawals should be equal to the future value of the deposits, so we set the two equations equal to each other and solve for
Step 4 :Finally, we find that Robin will receive approximately