Suppose you inherited $400,000 and invested it at 8.25% per year. How much could you withdraw...

Question

Question

Suppose you inherited $400,000 and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20 years?

Answer 1

Answer #1

Using financial calculator BA II Plus - Input details:	#
I/Y = YTM / Frequency =	8.250000
FV = Future Value or Face Value =	$0.00
N = Number of years x frequency =	20
PV = Present Value =	-$400,000.00
CPT > PMT = Payment =	$41,501.75
Formula: PMT = \|PV\| x R% x (1+R%)^N / ((1+R%)^N - 1)
*PMT = 4000000.0825* (1+0.0825)^20 / ((1+0.0825)^20 - 1)) =**	$41,501.75

Payment per year = $41,501.75

Answer 2

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