document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1054124>Question 1054124</A>: <I><SPAN STYLE=\"word-break: break-all;\"> You want to be able to withdraw $40,000 each year for 30 years. Your account earns 9% interest.\r<BR>\n" );
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document.write( "a) How much do you need in your account at the beginning?\r<BR>\n" );
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document.write( "b) How much total money will you pull out of the account?\r<BR>\n" );
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document.write( "c) How much of that money is interest?<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #669325 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=669325\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> I'm assuming it is compounded annually at 9%.<BR>\n" );
document.write( "A=P{1-(1+.09}^-30)}/.09<BR>\n" );
document.write( "A is the amount needed at the start (present value or PV in some formulae)<BR>\n" );
document.write( "P=40,000, the amount withdrawn each year<BR>\n" );
document.write( "0.09 is the interest per compounding period<BR>\n" );
document.write( "30 is the number of years.<BR>\n" );
document.write( "If this were compounded twice a year, the interest rate r would be 0.045 (per compounding), and the exponent would be -60.<BR>\n" );
document.write( "You do this on a calculator by 1.09^-30 and subtract that from 1.<BR>\n" );
document.write( "That is about 0.92.  don't round until the end.<BR>\n" );
document.write( "Then divide that by 0.09 and multiply by 40000 (or the reverse, since multiplication is commutative)<BR>\n" );
document.write( "A=$410946.16<BR>\n" );
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document.write( "You pull out $40,000 per year *30 years, or $1,200,000<BR>\n" );
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document.write( "Interest is 1200000-410946.16=$789,053.84. </SPAN>\n" );
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