question archive You plan on withdrawing monthly payments for the next ten years and have deposited $100,000 in an account
You plan on withdrawing monthly payments for the next ten years and have deposited $100,000 in an account
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You plan on withdrawing monthly payments for the next ten years and have deposited $100,000 in an account. If the rate of return is 8% compounded monthly determine the value of the monthly withdrawals Multiple Choice
$1813.28
$1,61328
$1,413 28
$2.013 28
$121328
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Answer:
Information provided:
Mortgage= $100,000
Time= 10 years*12= 120 months
Monthly interest rate= 8%/12= 0.6667%
The monthly withdrawal is calculated by entering the below in a financial calculator:
PV= -$100,000
N= 120
I/Y= 0.6667
Press the CPT key and PMT to compute the monthly withdrawal.
The value obtained is 1,213.28.
Therefore, the monthly withdrawal is $1,213.28.
Hence, the answer is option d.
