Excel Project: Today, you retire with $2 million in the bank. Starting today, and for each...

Excel Project:

Today, you retire with $2 million in the bank. Starting today, and for each of the next 30 years, you withdraw $100,000. If you earn 4 percent per year on your investments, how much money will you have after the last withdrawal?

Expert Solution

Form the question it is clear that the person withdraws $100,000 on the same day when the money is deposited in the bank. And we assume that the interest is paid at the end of the year.

For the first year initial amount in the bank will be 1,900,000 as the person withdraws 100,000 on the very first day.

After the completion of 1 year the interest will be added to the account @ 4%. (principal_amount*1.04)

For every other year, the person withdraws 100,000 on the first day and the updated amount in the bank is given by left column of the table.

After the interest is paid on completion of each year, the updated amount is shown in the right column.

So the person will withdraw $653,961.494 at the end of 30 years.(after the interest is added for the 30th year)

venereology answered 2 years ago

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