Answer:
The amount that you can withdraw each month from your account assuming a 20-year withdrawal period is:
= $8,860.36.
Explanation:
a) The future value of $760 invested monthly at 9.6% per annum for 25 years is:
= $949,787.51
b) The future value of $360 invested monthly at 5.6% per annum for 25 years is:
= $235,764.89
c) Total future value of savings = $1,185,552.40 ($949,787.51 + $235,764.89)
d) The amount that can be withdrawn monthly = $8,860.36
See calculations below:
N (# of periods) 300
I/Y (Interest per year) 9.6
PV (Present Value) 0
PMT (Periodic Payment) 760
Results
FV = $949,787.51
Sum of all periodic payments $228,000.00
Total Interest $721,787.51
N (# of periods) 300
I/Y (Interest per year) 5.6
PV (Present Value) 0
PMT (Periodic Payment) 360
Results
FV = $235,764.89
Sum of all periodic payments $108,000.00
Total Interest $127,764.89
N (# of periods) 240
I/Y (Interest per year) 6.6
PV (Present Value) 1185552.40
FV (Future Value) 0
Results
PMT = $8,860.36
Sum of all periodic payments $2,126,487.18
Total Interest $940,934.78
