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27 June, 09:58

Prudential Realty has an escrow account for one of its property management clients that contains $20,000. How long will it take to deplete the account if the client withdraws $5000 now, $4500 one year from now, and amounts decreasing by $500 each year

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  1. 27 June, 11:11
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    It will take 4 years to deplete the account.

    Step-by-step explanation:

    Prudential Reality has an escrow account that contains $20,000.

    The client withdraws $5000 now and that leaves $15000.

    After one year an amount of $4500 is withdrawn which leaves ($15000 - $4500) = $10500

    After two years an amount of $4000 is withdrawn which leaves ($10500 - $4000) = $6500.

    After three years an amount of $3500 is withdrawn which leaves ($6500 - $3500) = $3000

    After four years an amount of $3000 is withdrawn which leaves ($3000 - $3000) = $0 in the account.

    Hence it will take 4 years to deplete the account.
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