At age 13 you inherited $242000 and invested it at 8% compounded annually. How much can...

At age 13 you inherited $242000 and invested it at 8% compounded annually. How much can you withdraw annually in order to deplete the account if the first withdrawal is at age 31 and the last is at age 61? Note: your answer must be within $100 of the correct answer.

Expert Solution

Value at the age of 30 = 242,000(1.08)¹⁷ = $895,404.37

Calculating Annual Withdrawal,

Using TVM Calculation,

PMT = [PV = 895,404.37, FV = 0, N = 30, I = 0.08]

PMT = $79,536.47

Annual Withdrawal = $79,536.47

jeff jeffy answered 2 years ago

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