Question

Your client has been given a trust fund valued at $1.53 million. She cannot access the money until she turns 65 years old, which is in 20 years. At that time, she can withdraw $21,500 per month. If the trust fund is invested at a 4.5 percent rate, how many months will it last your client once she starts to withdraw the money? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Number of months

Answer 1

Number of years before retirement =20
Rate=4.5%
PV =1,530,000
FV at retirement =PV*(1+r)^n =1530000*(1+4.5%)^20 =3689922.46

Rate per month =4.5%/12
PMT=21500
Number of months using excel function =NPER(4.5%/12,21500,-3689922.46) =275.63 months