Question 310669: how much money would i have to put in a cd to draw $500 a month joinnow2000@aol.com Found 2 solutions by Fombitz, solver91311:Answer by Fombitz(32388) (Show Source):
That would depend a great deal on the annual interest rate and, to a lesser extent, on the compounding frequency, and if you are just considering an investment that will earn that much that will be allowed to remain in the account or if you want to actually draw out $500.00 every month as an annuity payment.
Let's presume annual interest expressed as a decimal. Let's assume that the institution actually pays one-twelfth of the annual interest each month and that you want a monthly pay annuity.
Let be the principal amount invested in the CD. Then you need:
Solving for
Right now, June 2, 2010, the best you will be able to do is
