Troubleshooting - A Guide to MATLAB for Beginners and Experienced Users - page 273

You have to work nearly 5 more years.

(g)

First, taking the whole bundle at once, after 20 years the $65,000 left after
taxes generates

format bank; option1 = 65000*(1 + (.05/12))ˆ(12*20)

option1 =
176321.62

The stash grows to about $176,322. The second option yields

S = .8*(100000/240)

S=

333.33

option2 = S*((1/(.05/12))*(((1 + (.05/12))ˆ241) - 1) - 1)

option2 =
137582.10

You only accumulate $137,582 this way. Taking the lump sum up front
is clearly the better strategy.

(h)

rates = [.13, .15, -.03, .05, .10, .13, .15, -.03, .05];

clear T
for k = 0:4
T = 50000;
for j = 1:5
T = T*(1 + rates(k + j));
end
disp([k + 1,T])
end

1.00 72794.74

2.00 72794.74