document.write( "Question 1153017: You want to be able to withdraw $40,000 each year for 25 years. Your account earns 8% interest. How much do you need in your account at the beginning? \n" ); document.write( "

Algebra.Com's Answer #775161 by ikleyn(52848) $\"\"$ $\"About$

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\n" ); document.write( "\n" ); document.write( "            I will assume that withdrawing is made at the beginning of each year and that the compounding is made annually
\n" ); document.write( "            at the end of each year.\r
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\n" ); document.write( "\n" ); document.write( "            By the way, these details are IMPORTANT and should go as a part of the problem formulation. \r
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document.write( "The general formula  in this case is  X = .\r\n" );
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document.write( "Here W = $40000 is the amount to withdraw at the beginning of each year;  r = 0.08 is the annual interest rate,  \r\n" );
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document.write( "p = 1 + 0.08 = 1.08;  n is the number of payment periods (number of years, which is  25  in this case),\r\n" );
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document.write( "X is the starting amount at the account (the value under the question). \r\n" );
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document.write( "So\r\n" );
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document.write( "          X =  = 461,150.33 dollars.     ANSWER\r\n" );
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document.write( "ANSWER.  To provide you goal, you need to have  $461,150.33  at the beginning at your account.\r\n" );
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\n" ); document.write( "\n" ); document.write( "See my lessons in this site associated with annuity saving plans and retirement plans \r
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\n" ); document.write( "\n" ); document.write( "    - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( "    - Annuity Due saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( "    - Solved problems on Ordinary Annuity saving plans \r
\n" ); document.write( "\n" ); document.write( "    - Withdrawing a certain amount of money periodically from a compounded saving account (*)\r
\n" ); document.write( "\n" ); document.write( "    - Miscellaneous problems on retirement plans \r
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\n" ); document.write( "\n" ); document.write( "and especially lesson marked (*) in the list as the most relevant to the given problem.\r
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