1. A widow received $100,000 from an insurance company after her husbands death. She wants to deposit this amount in a savings account that earns interest at a rate of 3% compounding monthly. She would like to make 48 equal monthly withdrawals over four years, so that this savings account will have a zero balance with the last withdrawal. Show her accounts monthly balance in a cash balance table.

1. What is the monthly effective interest rate?
2. How much would she withdraw each month?

Dissection (40%): identify input & output variables and include cash flow table

Solution (60%): identify method