You decide to open an IRS-approved retirement account at your local brokerage firm. Your best estimate is that it will earn 9 percent.
At the end of each year for the next 25 years, you will deposit $4000 per year into the account (25 total deposits).
3 years after the last deposit, you will begin making annual withdrawals.
A) How much money is in the account 1 year before the first withdrawal?
B) If you want to make 30 annual withdrawals, what amount will you be able to withdraw each year?
C) If you want the account to last forever, what amount will you be able to withdraw each year?
The ANSWERS ARE
A) $251,582.84
B) $24,488.16
C) $22,642.46
1 answer