SOLUTION: You want to be able to withdraw $20,000 each year for 30 years. Your account earns 6% interest. How much do you need in your account at the beginning?
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Question 1166600: You want to be able to withdraw $20,000 each year for 30 years. Your account earns 6% interest. How much do you need in your account at the beginning?
$___ Answer by ikleyn(52873) (Show Source):
Use the general formula X = .
In this case the withdrawal annual rate is W = $20000, the annual compounding rate
is r = 0.06, p = 1 + 0.06 = 1.06, the number of payment periods is n = 30. So
X = = 2912814.42 dollars. ANSWERANSWER. You need to have $2912814.42 at the beginning at your account.
Then you get, actually, 30*20000 = 600,000 dollars from your account in 30 years (!)
Solved.
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