A future retiree wants to be able to have yearly withdrawals of $25,000 from his retirement account for a period of 30 years starting a year after he turns 67. If the retiree is able to earn a yearly rate of return of 6.3% in his retirement account during the 30 year period, what must be the approximate balance in the account on his 67 birthday, that is, the beginning of the retirement period?
$306,776
$333,351
$2,084,007
$1,096,859
Amount in the beginning = Present value of all future withdrawals
= 25000*PVAF(6.3%, 30 years)
= 25000*13.3340
= $333,350
Hence, the answer is $333,351
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