A fund of $30 comma 000 has been set up to pay for Edwin's music lessons over the next twelve years. If interest is 6.21% compounded monthly, what is the size of each month-end withdrawal from the fund?
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Part 1
The amount of each month-end withdrawal is $

enter your response here.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

You want the amount of each month-end withdrawal that can be made for 12 years from a fund of 30,000 dollars earning 6.21% interest compounded monthly.

Amortization

The amortization formula can be used to find the amount of the payment that can be withdrawn monthly for n months when the monthly interest rate is r.

[tex]A=\dfrac{Pr}{1-(1+r)^{-n}}\\\\\\A=\dfrac{30\,000\cdot0.005175}{1-1.005175^{-144}}\approx296.0257[/tex]

The dollar amount of each month-end withdrawal is 296.03.

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Additional comment

Since we have rounded up the withdrawal amount, the last withdrawal will be a few cents short.

In 12 years, there are 12·12 = 144 months. The monthly interest rate as a decimal is 6.21%/12 = 0.005175.