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1. Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and
to earn 7.5% compounded annually on his invested funds. How much could he withdraw at
the end of each of the next 25 years?
The present value (PV) = 375,000
The annual Interest rate (r) = 0.075
The Retirement Period. NPER = 25
The Future Value (FV) = 0
Annual withdrawal (PMT) is calculated as follows
Let’s assume the value is X
X (1−(1+r) −T)
= 375, 000
X (1−(1+7.5%) −25)
11.146945X = 375, 000
Divide both sides by 11.146945 to get X
X =33,641.50 answers
2. Your uncle has $631,000 and wants to retire. He expects to live for another 30 years, and
he also expects to earn 5.8% compounded annually on his invested funds. How much could
he withdraw at the beginning of each of the next 30 years?
Let’s assume the amount he will withdraw will be y
y (1−(1+r) −T)
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