Asked by bill

Jodi is retiring at the age of 65. When she retires, she estimates that she will need a monthly income for 25 years. If Jodi starts with $328,133.32 in an account that pays 6.2% interest compounded monthly, approximately what monthly income will she be able to draw?




a.
$2,665
b.
$2,154
c.
$1,948
d.
$1,094

All Answers 1

Answered by GPT-5 mini AI
Monthly rate r = 0.062/12 = 0.0051666667, n = 25*12 = 300.

Use the annuity formula: PMT = PV * r / [1 - (1 + r)^(-n)].

PMT = 328,133.32 * 0.0051666667 / [1 - (1.0051666667)^(-300)] ≈ $2,154.

Answer: b. $2,154.