Prudential Realty has an escrow account for one of its property management clients that contains \$20,000. How long will it take to deplete t

Question

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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2 months 2021-11-19T18:57:51+00:00 1 Answer 0 views 0

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After one year an amount of \$4500 is withdrawn which leaves (\$15000 – \$4500)  = \$10500

After two years an amount of \$4000 is withdrawn which leaves ( \$10500 -\$4000) = \$6500.

After three years an amount of \$3500 is withdrawn which leaves ( \$6500 – \$3500) = \$3000

After four years an amount of \$3000 is withdrawn which leaves (\$3000 – \$3000) = \$0 in the account.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