Annuities Business Calculations?

Question

Vusi received a R10000 bonus from his employer.Rather than spend it all at once,he decided to deposit it into a bank account that pays 12% interest p.a. compounded monthly.He will make equal monthly withdrawals for 2 years.after the last withdrawal the account will be empty.How much will he withdraw each month?

1)R470.72

2)R500

3)R512.35

4)R460.53

Please show steps

Answer 1

470.72.

input the following formula into excel:

=PMT(0.01,24,-10000)

or into a financial calculator:

PV=10,000

n=24

i=1%

Compute: PMT

Answer 2

On my calculator it is as follow:

Interest - compounded monthyl, so Interest is 1 (12%/12 months)

N = number of periods 2 years times 12 months for compunded monthly, so N=24

Present Value is 10000

Future Value is zero

Solve for PMT, which is 470.72