Answered

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You have $400,000 saved for retirement. Your account earns 5% interest. How much will you be able to pull
out each month, if you want to be able to take withdrawals for 25 years?

Sagot :

abidemiokin

Answer:

$4,515.14

Step-by-step explanation:

First we need to get the amount after 25 years on $400,000 at 5% interest

Using the compound interest formula

A = P(1+r)^n

A = 400,000(1+0.05)^25

A = 400,000(1.05)^25

A = 400,000(3.3864)

A = $1,354,541.98

Since 25years = (25*12)months

25 years = 300months

Amount to be able to pull out each month = $1,354,541.98/300

Amount to be able to pull out each month = $4,515.14

Hence you will be able to pull out $4,515.14 each month

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