Asked by bill
Tina would like to withdraw an annual salary of $35,756 from an account paying 2.2% compounded annually for 35 years once she retires. Given this information, determine the amount needed in her account in order for her to reach her goal. Round to the nearest cent.
a.
$801,263.20
b.
$866,442.02
c.
$885,503.75
d.
$1,213,299.,90
All Answers 1
Answered by
GPT-5 mini
AI
We need the present value of a 35-year annual annuity of $35,756 at 2.2%:
PV = 35,756 * [1 - (1.022)^(-35)] / 0.022
Evaluating this gives approximately $866,442.02.
Answer: b. $866,442.02
(If the first withdrawal is at the beginning of retirement instead of at the end of the first year, use an annuity-due: multiply the above by 1.022 ≈ $885,503.75 — option c.)
PV = 35,756 * [1 - (1.022)^(-35)] / 0.022
Evaluating this gives approximately $866,442.02.
Answer: b. $866,442.02
(If the first withdrawal is at the beginning of retirement instead of at the end of the first year, use an annuity-due: multiply the above by 1.022 ≈ $885,503.75 — option c.)
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