SOLUTION: You want to be able to withdraw $30,000 each year for 30 years. Your account earns 4% Interest. A) How much do you need in your account at the beginning? B) How much total money wi

Algebra ->  Finance -> SOLUTION: You want to be able to withdraw $30,000 each year for 30 years. Your account earns 4% Interest. A) How much do you need in your account at the beginning? B) How much total money wi      Log On


   

Question 1181794: You want to be able to withdraw $30,000 each year for 30 years. Your account earns 4% Interest. A) How much do you need in your account at the beginning? B) How much total money will you pull out of your account? C) How much of that money is Interest?
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
This will be
P=d(1-(1+(r/k)^(-Nk))/(r/k), d is $30000, r is 0.04, k is 1
P=30000(1-(1.04^-30)/0.04
This is $518,761 needed at the beginning.
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You will pull out a total of $30K/yr*30 yr or $900,000
and the interest is $900,000-$518,761=$381,239