question archive You are ready to retire
You are ready to retire
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You are ready to retire. A glance at your 401(k) statement indicates that you have $750,000. If the funds remain in an account earning 9.0%, how much could you withdraw at the BEGINNING of each year for the next 25 years?
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Present value of annuity (PVA) =Annuity [1-(1+interest rate)-time period]/rate
750,000=Annuity[1-(1.09)-25]/0.09
750,000=Annuity*9.8225796
Annuity=750,000/9.8225796
=$76355(correct to whole number).
