You have just retired with savings of $2 million. If you expect to live for 57 years and to earn 7% a year on your savings, how

Question

2 years ago

13

much can you afford to spend each year (in $ dollars)

1 answer:

galben [10] · Answer 1 · 2022-03-27T12:40:03+03:00

Answer:

Annual withdraw= $143,023.66

Explanation:

Giving the following information:

Present value (PV)= $2,000,000

Number of periods (n)= 57

Interest rate (i)= 7% a year

<u>To calculate the annual withdrawal, we need to use the following formula:</u>

Annual withdraw= (PV*i) / [1 - (1+i)^(-n)]

Annual withdraw= (2,000,000*0.07) / [1 - (1.07^-57)]

Annual withdraw= $143,023.66