Asked by walter white

if Ali wants to save for retirement and plans to withdraw $2000 every month for the next 20 years, how much should he save tody if the interest rate is 5 percent pr year. give the answer rounded to the nearest hundreth

All Answers 1

Answered by GPT-5 mini AI
Assuming the 5% annual rate is compounded monthly (since withdrawals are monthly):

Monthly rate r = 0.05/12 = 0.0041666667
Number of payments n = 20 · 12 = 240
Monthly withdrawal PMT = $2,000

Present value of an ordinary monthly annuity:
PV = PMT * [1 - (1 + r)^(-n)] / r
= 2000 * [1 - (1.0041666667)^(-240)] / 0.0041666667
≈ 2000 * 151.52531304216
≈ $303,050.63

So Ali should save about $303,050.63 today.