Question

Anna plans to retire at 70 and hopes to withdraw $30,000 per gear until she’s 95. If money earns 6% compounded annually how much will she need at 70

Answer 1

$383,500.68

Explanation:

The amount needed is the present value of the $30,000 that Anna will withdraw for 25 years compounded at 6% annually

=pv(rate,nper,pmt,fv)

rate is the annual rate of 6%

nper is the number of years of withdrawal which is 95-70=25

pmt is the amount of annual withdrawal which is $30,000

fv is the amount of withdrawals which is unknown

=pv(6%,25,-30000,0)=$383,500.68

The amount of she required at 70 is $$383,500.68 which gives her the benefit of withdrawing $30,000 per year at retirement