Question

Your uncle just won the weekly lottery, receiving $375,000, which he invested at a 7.5% annual rate. He now has decided to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. What is the maximum number of whole payments that can be withdrawn before the account is exhausted, i.e., before the account balance would become negative? (Hint: Round down to the nearest whole number.)

Select one:

a. 26

b. 25

c. 22

d. 23

e. 24

Answer 1

Please provide rating....

we have to use financial calculator to solve this problem
Put in calculator -
PV	-375000
PMT	35000
I	7.50%
FV	0
Compute N	22.50
Therefore maximum number of whole payment = 22
correct answer =	22