SOLUTION: You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest.
a) How much do you need in your account at the beginning?
b) How much tota
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-> SOLUTION: You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest.
a) How much do you need in your account at the beginning?
b) How much tota
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Question 1203101: You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest.
a) How much do you need in your account at the beginning?
b) How much total money will you pull out of the account?
= The amount to be withdrawn each year = = The interest rate per annum =%=> = The number of periods the interest is applied in a year = = The number of years withdrawal is made =
a. The amount that should be in the account at the beginning is given by the payout annuity formula as follows;
substitute given values and we get:
The amount needed in the account at the beginning,
