Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and to earn 7.5% on his invested
funds. How much could he withdraw at the end of each of the next 25 years and end up with zero in the account?
Answers
Answered by
5
Explanation:
Present value of annuity due=(1+rate)*Annuity[1-(1+interest rate)^-time period]/rate
375000=1.075*Annuity[1-(1.075)^-25]/0.075
375000=Annuity*11.9829668
Annuity=375000/11.9829668
=$31294.42(Approx).
Answered by
0
Answer:
He can withdraw $31294.42(Approx) at the end of each of the next 25 years and end up with zero in the account
Explanation:
Present value of annuity due=(1+rate)*Annuity[1-(1+interest rate)^-time period]/rate
375000=1.075*Annuity[1-(1.075)^-25]/0.075
375000=Annuity*11.9829668
Annuity=375000/11.9829668
=$31294.42(Approx).
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