Solving a Financial Problem: Calculating Withdrawals, Interest & Remaining Funds

[SugerQueen]

Homework Statement

initial amount = $450 000
interest rate = 4.8% per month
withdrawal = $3600 per month

This is a question on an old test paper. It is calculator assumed.
We use Casio classpad calculators.
a) amount remaining after ten years?
$173462.47
b)time to exhaust account?
14.5 years
c) total withdrawals?
173
d) total interest earned?
This is where I am stuck. Up until now I have managed to do everything on the financial application, but here I run out of ideas...
I also have not managed to come up with a working sequence. My guess would be:
An+1 = An x 1.048 - 3600
A_o = 450 000

But that did not appear to work as everything is calculated monthly... any help would be fantastic thanks :)

 

[in-a-box]

Assuming we're talking about simple interest,

$Total~Interest = Principal \times Interest~Rate \times Time$

Where time has to be in the same interval as the interest rate. You just need to convert your time interval from years to months. Then for a final equation, multiply the monthly withdrawal by the number of withdrawals and subtract it from the total interest.

 

[noobilly]

I would imagine that whether the withdrawal is made before or after the interest is calculated makes a big difference. Is it stated explicitly?

 

[LawrenceC]

initial amount = $450 000
interest rate = 4.8% per month
withdrawal = $3600 per month

4.8% per month interest. Do you mean 4.8% per year? 4.8% per month adds 21.6K bucks a month to the account. I need an IRA that does that!