Question

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having saved up a nest egg of $1.5 million, retires this year and looks forward to...

having saved up a nest egg of $1.5 million, retires this year and looks forward to a 30-year retirement. If his nest egg is expected to earn 9% APR and is compounded monthly, what will be his monthly income during retirement?

$50,000.00

$17,205.12

$14,600.45

$12,069.34

Solutions

Expert Solution

Number of periods = 30 * 12 = 360

Monthly rate = 9% / 12 = 0.75%

Presnet value = payments * [1 - 1 / (1 + r)^n] / r

1,500,000 = payments * [1 - 1 / (1 + 0.0075)^360] / 0.0075

1,500,000 = payments * [1 - 0.067886] / 0.0075

1,500,000 = payments * 124.281866

Payments = $12,069.34

jeff jeffy answered 2 years ago
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