Answered

Welcome to Westonci.ca, the ultimate question and answer platform. Get expert answers to your questions quickly and accurately. Get accurate and detailed answers to your questions from a dedicated community of experts on our Q&A platform. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.

You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. (Note: you make 361 total monthly deposits into your retirement account.) You will begin to make withdrawals from the account the first month after you retire. If you plan to live an additional 25 years and leave $900,000 to your heirs, you will be able to withdraw $_____ each month. (Note: you make 300 total monthly withdrawals from your retirement account.)

Sagot :

facundobuzzetti

Answer:

Monthly withdraw= $4,752.01

Explanation:

Giving the following information:

Monthly deposit= $1,000

Number of perios= 361 months

Interest rate= 0.08/12= 0.0067

First, we need to calculate the Future Value at the moment of retirement:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

FV= {1,000*[(1.0067^361) - 1]} / 0.0067

FV= $1,513,584.37

Now, we can calculate the monthly withdraw:

PV= 1,513,584.37 - 900,000= $613,584.27

Monthly withdraw= (FV*i) / [1 - (1+i)^(-n)]

Monthly withdraw= (613,584.37*0.0067) / [1 - (1.0067^-300)]

Monthly withdraw= $4,752.01

We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for visiting Westonci.ca. Stay informed by coming back for more detailed answers.