SOLUTION: You have $500,000 saved for retirement. Your account earns 10% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 20 years?

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Question 1153013: You have $500,000 saved for retirement. Your account earns 10% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 20 years?
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
You have $500,000 saved for retirement.
Your account earns 10% interest.
How much will you be able to pull out each month, if you want to be able to take withdrawals for 20 years?
:
The formula
A = P%281-%281%2B%28r%2Fn%29%29%5E%28-nt%29%29%2F%28r%2Fn%29%29, where
A = original amt
P = payment
r = interest rate in decimal form
n = no. of periods per year
t = no. of years
:
P%281-%281%2B%28.1%2F12%29%29%5E%28-12%2A20%29%29%2F%28.1%2F12%29%29 = 500000
:
P%281-%281.0083333%29%5E%28-240%29%29%2F%28.1%2F12%29%29 = 500000
:
P%281-.1364616192%29%2F%28.1%2F12%29%29 = 500000
:
P%28.863538488%29%2F.00833333%29 = 500000
:
103.6246P = 500000
P = 500000%2F.1036246
P = $4825.11 taken each month for 20 yrs