SOLUTION: You have $300,000 saved for retirement. Your account earns 9% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 25 years?

Question 1175526: You have $300,000 saved for retirement. Your account earns 9% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 25 years?

Found 2 solutions by Boreal, ikleyn:
Answer by Boreal(15235)   (Show Source): You can put this solution on YOUR website!
Po=a(1-(1+(r/t)^(-nt)/(r/t)
r/k=.09/12=0.0075
Po=300000
therefore,
2250=a(1-(1+(r/t)^(-nt), nt=25*12=300
1-(1.0075)^-300=0.8937, don't round until the end
2250/.8937=a=$2517.59

Answer by ikleyn(52776)   (Show Source): You can put this solution on YOUR website!
.

           Let me disclose you a piece of info which can shock you.

9% is very high annual percentage, and having $300,000 saved for retirement on your account,

it earns   0.09*300000 = 27,000 dollars annually.

So, you can take $27,000 from your account (after it is compounded) without decreasing this basic amount of $300,000.

            AGAIN: under given condition, you can have $27000 once per year
            EVERY YEAR without diminishing you base account (!), practically FOREVER (!) (!)

Isn't it a shocking info ?

Consider this info as an entertainment.   I posted it to you to make you smiling . . .

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