You have just retired with savings of $1.5 million. If you expect to live for 30...

You have just retired with savings of $1.5 million. If you expect to live for 30 years and to earn 8% a year on your savings, how much can you withdraw each year? Assume that you withdraw the money at the start of each year.

$112,148.50 A

$120,000.00 B

$123,371.44 C

$133,241.15 D

Solutions

Expert Solution

Amount of Savings today =1500000
Rate =8%
Number of years =30
Amount to Withdraw at start of each year =PV/(((1+r)*(1-(1+r)^-n)/r))=1500000/(((1+8%)*(1-(1+8%)^-30)/8%) =123371.44 (Option c is correct option)

jeff jeffy answered 2 years ago

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