SOLUTION: You have a saving $350,000 in a retirement account that earns 4.8% annual interest. You want the savings to last 20 years. How much money can you withdraw each month? Suppose tha

Question 1194628: You have a saving $350,000 in a retirement account that earns 4.8% annual interest. You want the savings to last 20 years. How much money can you withdraw each month?
Suppose that you instead want to withdraw $3000 per month. How long will your savings last? Round you answer up to the next whole number of months.

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
you can use the following online calculator to help solve this.
https://arachnoid.com/finance/index.html
if you are withdrawing every month, then the interest rate is probably being compounded monthly.
in that case:
the number of months is 20 * 12 = 240 and the interest rate per month is 4.8/12 = .4% per month.
the amount you can withdraw at the end of each month will be equal to 2271.35.
if you want to withdraw 3000 at the end of each month, then the number of months the money will last will be 157.47.
157.57 months is equal to 13.14 years, rounded to the nearest 100th of a year.
here are the results from using this calculator.

inputs to the first display are everything except pmt.
output is pmt.
inputs to the second display are everything except np.
output is np.
values listed will be different if you withdraw at the beginning of each month rather than at the end of each month.
assumption of interest rate being compounded monthly when withdrawals are madde monthly is a standard assumption normally used.
let me know if you have any questions.
theo

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