I dont know how to summarise this question sorry.

Question

Laura invested €1200 to be withdrawn in two equal instalments. The first instalment was to be withdrawn at the end of the second year and the other to be withdrawn at the end of the third year. if the investment earned 12% in the first year, 10% in the second year and 8% in the third year, find the amount of each instalment withdrawn, correct to the nearest euro.

Answer 1

Year 0 (initial amount) is:  1,200 Euro

 

End of Year 1:   1200 x 1.12 = 1,344 Euros

 

End of year 2:  1,344 x 1.10 = 1,478.4 Euros

 

          The obvious "trick" here is that we can't take out 1/2 of this amount of money, as there has to be an amount left over that will earn the 8%, which will comprise the 2nd withdrawal (same amount as the first withdrawal) installment at the end of Year 3

 

         I would venture to state that we would need to take out over 1/2 of the money, as that amount remaining will earn the 8% interest, in order to help achieve 2 equal installment withdrawals.

 

     That should perhaps be enough hints to get you through the remainder of the problem.