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Darina [25.2K]
4 years ago
6

Your Aunt Elsa has $500,000 invested at 6.5%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each ye

ar, starting immediately. What is the maximum number of whole payments that can be withdrawn before the account is exhausted, i.e., before the account balance would become negative?
Business
1 answer:
Ksju [112]4 years ago
7 0

Answer:

22.85

Explanation:

Present value (PV): $500,000

Rate: 6.5% per annual

Payment (PMT) : $40,000 per year

We can use excel to calculate the maximum number of whole payments that can be withdrawn before the account is exhausted

=NPER(rate, PMT, -PV,,1) = NPER (6.5%,40000,-500000,,1) = 22.85

Download xlsx
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