ou have $300,000.00 saved in a retirement account paying 4% interest compounded monthly and are ready to start your retirement. You have to figure out how much money you can safely take out of your account every month because you don't want to run out of money before you die. How much money can you take out each month if you expect to live another 25 years?
ou have $300,000.00 saved in a retirement account paying 4% interest compounded monthly and are ready to start your retirement. You have to figure out how much money you can safely take out of your account every month because you don't want to run out of money before you die. How much money can you take out each month if you expect to live another 25 years?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 10P
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Question
You have $300,000.00 saved in a retirement account paying 4% interest compounded monthly and are ready to start your retirement. You have to figure out how much money you can safely take out of your account every month because you don't want to run out of money before you die.
How much money can you take out each month if you expect to live another 25 years?
- You can safely withdraw $__________ a month for 25 years.
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