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Finance

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My uncle Samuel has $450,000 invested at 6.5%, and he plans to retire. He wants to withdraw $40,000 at the beginning of each year, starting immediately. How many years will it take to exhaust her funds, run the account down to zero?

  • Finance -

    450000=40000 + 40000(1 - 1.065^-n)/.065

    I am using
    PV = Paym(1 - (1+i)^-n)/n
    but ....
    that formula assumes that payments are made at the end of the period, which explains the single 40,000

    .66625 = 1 - 1.065^-n
    1.065^-n = .33375
    log both sides
    -n(log 1.065) = log .33375
    -n = -17.425

    n = appr 17.4 years

    (not many years of retirement with money, I have already been retired for 17 years and hope to have lots left. )

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