Question

your client has been given a trust fund valued at 1.60 million. She cannot access the money until she turns 65 years old, which is in 15 years. At that time ahe can withdraw 25,000 per month.

Problem 4 and 5-4 Future Value and Number of Annuity Payments Your client has been given a trust fund valued at $1.60 million. She cannot access the money until she turns 65 years old, which years. At that time, she can withdraw $25,000 per month If the trust fund is invested at a 55 percent rate, how many months will it last your client once she starts to withdraw the money? not round intermediate calculations and round your final answer to 2 decimal places.) Number of months

Answer 1

Information provided:

Future value= $1,600,000

Monthly withdrawal= $25,000

Interest rate= 5.5%/12= 0.4583% per month

The number of months till the trust fund will last the client is calculated by entering the below in a financial calculator:

FV= 1,600,000

PMT= 25,000

I/Y= 0.4583

Press the CPT key and N to compute the number of months till the trust fund will last the client.

The value obtained is 56.2499

Therefore, the trust fund will last the client 56.25 months.

In case of any query, kindly comment on the solution.