Answer:
$179,409.81
Explanation:
The computation of annual withdrawal is shown below:-
Future value of annuity = Annual investment in bond × FVA (10%, 7)
= $7,600 × 13.81645
= 105,005.00
Refer to the Future value of annuity table
Now Future value of the existing balance
= $164,000 × (1.07^10)
= $322,612.82
So, the total value of the bond investment in 10 years is
= Future value of an annuity + Future value of the existing balance + value of the stock investment in 10 years
= $105,005 + $322,612.82 + $604,000 × (1.105^10)
= $2,066,922.66
And, the PVIFA at 6.25% for 21 years is 11.52068
So, the annual withdrawal is
= total value of the bond investment in 10 years ÷ PVIFA at 6.25% for 21 years
= $2,066,922.66 ÷ 11.52068
= $179,409.81
