SOLUTION: Uncle Moneybags has $500,000 saved for retirement. He has an account earning 8% interest. If Uncle Moneybags wants to be able to make withdrawals for 25 years, how much can he with

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Question 1153015: Uncle Moneybags has $500,000 saved for retirement. He has an account earning 8% interest. If Uncle Moneybags wants to be able to make withdrawals for 25 years, how much can he withdrawal each month? Round to the nearest cent.
Found 2 solutions by ankor@dixie-net.com, ikleyn:
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
Uncle Moneybags has $500,000 saved for retirement.
He has an account earning 8% interest.
If Uncle Moneybags wants to be able to make withdrawals for 25 years, how much can he withdrawal each month? Round to the nearest cent.
:
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%281%2B%28.08%2F12%29%29%5E%28-12%2A25%29%29%2F%28.08%2F12%29%29 = 500000
:
P%281-%281.0066666%29%5E%28-300%29%29%2F%28.08%2F12%29%29 = 500000
:
P%281-.136236516%29%2F%28.0066666%29 = 500000
:
P%28.863763484%29%2F.00666666%29 = 500000
:
129.5645P = 500000
P = 500000%2F129.5645
P = $3859.01 taken each month for 25 yrs

Answer by ikleyn(52896) About Me  (Show Source):
You can put this solution on YOUR website!
.

Strictly speaking, this problem, as it is worded, printed, posted and presented, is DEFECTIVE, since
it does not say that the account is compound monthly.