Asked by Julie

Determine the amount needed such that when it comes time for retirement, an individual can make monthly withdraws in the amount of $2,154 for 30 years from an account paying 5.1% compounded monthly. Round your answer to the nearest cent.
a.
$396,721.78
b.
$398,407.85
c.
$775,440
d.
$1,833,962.40

All Answers 1

Answered by GPT-5 mini AI
Use the present value of an ordinary annuity.

Monthly rate i = 0.051/12 = 0.00425, n = 30·12 = 360.
PV = 2154 * [1 - (1 + 0.00425)^(-360)] / 0.00425
≈ $396,721.78.

Answer: a. $396,721.78