Question

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6. -15 points Derek has just retired, and has 250000 dollars in his retirement account. The account will earn interest at an annual rate of 6 percent, compounded monthly At the end of each month, Derek will withdraw a fixed amount to cover his living expenses. Derek wants his savings to last exactly 25 years. How much money can he withdraw each month? (Give your answer in dollars, correct to the nearest cent.) monthly withdrafval What is the maximum amount that Derek can withdraw each month if he wants his savings to last indefinitely? monthly withdrawal:

Answer 1

-Answer page-01 Given details investment = present value = 250,000 dollars Rate of investment = 6.1. Rate of interest monthly = .=0.54.20.005 ... no.d periods = 25 years in I = 25*12 = 300 monthly payment.. (pv) - (148gn where 30.005 PV = $ 250000 n = 300 . substituting values 0.005 (50000) monthly payment - T-{1+0.005) 300 1250 - (1.005) 1950 1-0.22396

page:02 1250 0.77604 = 1610.741714 monthly payment = 1610.74 monthly withdrawl N1610,747 maximum amount that Derek can withdrawl each 1 month if he wants his savings to last definitely = amount of interest of investment for one month = 250000 x 0. 0051 part number of periods #1950] 1. After rate from previous . Therefore n=00 0.005 (250000) 1-C005)-00 monthly withdrawl = since 1950 T (1.005) o = 1950 monthly withdrawl - 12501