Calculate how much money $500,000 would provide in monthly income if the money were to last...
Calculate how much money $500,000 would provide in monthly income if the money were to last 35 years and the funds that were not withdrawn grew at a rate of 6% per year
Homework Answers
| Monthly income | = | Present value of monthly cash flow | / | Present value of annuity of 1 | ||||
| = | $ 5,00,000.00 | / | 175.3802 | |||||
| = | $ 2,850.95 | |||||||
| working: | ||||||||
| Present value of annuity of 1 | = | (1-(1+i)^-n)/i | Where, | |||||
| = | (1-(1+0.005)^-420)/0.005 | i | = | 6%/12 | = | 0.005 | ||
| = | 175.3802262 | n | = | 35*12 | = | 420 | ||
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