How much money do you need in your account today?

User Generated

cnhy_tnzol

Business Finance

Description

If you are 65 years old, and want to draw $20,000 a year,for the next 30 years, and expect to live to be 100 years old, Your account pays a 6% interest rate. How much money do you need in your account today?

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Explanation & Answer

Thank you for the opportunity to help you with your question!

First we get  the total amount   $20,000*  30=$600,000

now to get the principal  is p=A/1+rt

p=600000/1+0.06*30

p=214,258.71

This the money should be in the account now

Please let me know if you need any clarification. I'm always happy to answer your questions.


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