Answer:
The monthly withdrawal is $701.10
Explanation:
The monthly withdrawal can be computed with PMT formula using excel spreadsheet.
The formula is PMT(rate,nper,-pv)
The fv and type are both taken as zero.
However, the rate of 5.5 % given in the question is a yearly rate,but the requirement of the question is monthly withdrawal, hence the rate is divided by 12 months to reflect a monthly rate i.e 5.5%/12
Besides, the nper should also to be adapted to show that the withdrawal is to be made every month for 18 years, hence nper is 12*18
The computation of the pmt based on the above highlighted points is found in the attached.
